2. Safe harbor statement
Certain statements and information in this presentation are not based on historical facts and constitute forward-looking statements within the meaning of applicable
securities laws (“forward-looking statements”) including statements and information relating to our financial guidance summary for Q4 2013, our guidance drivers for 2013
and our business outlook for 2013 and beyond. Forward-looking statements are provided to help you understand our views of our short and longer term prospects. We
caution you that forward-looking statements may not be appropriate for other purposes. We will not update or revise our forward-looking statements unless we are required
to do so by securities laws.
Forward-looking statements:
• typically include words and phrases about the future, such as: “outlook”, “may”, “estimates”, “intends”, “believes”, “plans”, “anticipates” and “expects”;
• are not promises or guarantees of future performance. They represent our current views and may change significantly;
• are based on a number of material assumptions, including those listed below, which could prove to be significantly incorrect:
• Our ability to develop, manufacture and sell new products and services that meet the needs of our customers and gain commercial acceptance;
• Our ability to continue to sell our products and services in the expected quantities at the expected prices and expected times;
• Expected cost of goods sold;
• Expected component supply constraints;
• Our ability to “win” new business;
• Expected deployment of next generation networks by wireless network operators;
• Our operations are not adversely disrupted by component shortages or other development, operating or regulatory risks; and
• Expected tax rates and foreign exchange rates.
• are subject to substantial known and unknown material risks and uncertainties. Many factors could cause our actual results, achievements and developments in our
business to differ significantly from those expressed or implied by our forward-looking statements, including, without limitation, the following factors, which are
discussed in greater detail. These risk factors and others are discussed in our Annual Information Form and Management’s Discussion and Analysis of Financial
Condition and Results of Operations, which may be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov and in our other regulatory filings with the
Securities and Exchange Commission in the United States and the Provincial Securities Commissions in Canada.
• We may experience higher than anticipated costs; disruption of, and demands on, our ongoing business; diversion of management’s time and attention; adverse
effects on existing business relationships with suppliers and customers and employee issues in connection with the divestiture of the AirCard assets and
operations;
• Actual sales volumes or prices for our products and services may be lower than we expect for any reason including, without limitation, the continuing uncertain
economic conditions, price and product competition, different product mix, the loss of any of our significant customers, competition from new or established
wireless communication companies;
• The cost of products sold may be higher than planned or necessary component supplies may not be available, are delayed or are not available on commercially
reasonable terms;
• We may be unable to enforce our intellectual property rights or may be subject to litigation that has an adverse outcome;
• The development and timing of the introduction of our new products may be later than we expect or may be indefinitely delayed;
• Transition periods associated with the migration to new technologies may be longer than we expect.
Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results.
USE OF NON-GAAP FINANCIAL MEASURES
•
This presentation contains references to certain non-GAAP financial measures and should be viewed in conjunction with our press release and supplementary
information on our website (www.sierrawireless.com), which present a complete reconciliation of GAAP and Non-GAAP results.
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3. Sierra Wireless Corporate Profile
The global leader in M2M devices and cloud services
Industry’s most comprehensive offering
Proven technology innovators and trusted partner
Founded in 1993
LTM1 revenue: $433 million
Publicly listed:
NASDAQ (SWIR)
TSX (SW)
R&D
Head office:
Vancouver, BC
R&D
R&D
Approx. 850 employees worldwide
Customers in 130+ countries
1. Last Twelve Months as of September 30, 2013
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4. We are enabling a connected world
By providing intelligent wireless solutions
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5. Long term growth opportunity
Billions of connected devices
12B+
1.4B
connected
devices
Embedded
modules market
connected
devices
$1.8B
Embedded
modules market
$1.0B
2012
2016
2020
Source: ABI Research, Machina
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6. Sierra Wireless is the market leader
#1 in machine-to-machine
market globally
Blue-chip customers and
partners
Cellular M2M Embedded Module
Market Share in 2012(1)
24%
Sierra
Wireless
34%
19%
23%
Source: ABI Research
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8. AirPrime® Embedded Wireless Modules
Wireless modules, software and services for OEMs
Embedded Modules
•
•
•
•
•
•
4G LTE
3G HSPA/HSPA+
3G EVDO
2G 1xRTT
2G GPRS/EDGE
GPS
Software Solutions and Services
Development
Tools
Management
Services
Embedded SIM
Embedded
Applications
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9. AirLink® Intelligent Gateways
Wireless terminals for M2M and mobile applications
Security
Sales & Payment
Public Safety
Gateways and Routers
Business Continuity
Utilities &
Infrastructure
Fleet Management
& Field Service
• Ruggedized and commercial grade
• 2G, 3G and 4G platforms
• Rapid configuration and programmability
Software Solutions and Services
Device Management
and Diagnostics
Embedded Intelligence
and Security
Application Framework
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11. A customer success: Nespresso
Custom Web Application
Web APIs
Hardware
Integration
Programmable
Modem
ERP
• Asset Data Management
• Device Management
• Subscription Management
Network
Operator
M2M Cloud
Accelerating M2M Application Development & Deployment
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12. Global footprint, global R&D
Richmond, BC
Corporate Headquarters
London
Paris
Toulouse
Munich
Beijing
Tokyo
Flextronics & USI (Shanghai)
Taipei
San Diego
Bangalore Hong Kong and
Shenzhen
= R&D, Marketing, Sales, Operations
= Manufacturing
= Sales and Support
Jabil
(Brazil)
Johannesburg
Melbourne
Sierra Wireless operates worldwide serving global
network operators, OEMs, enterprises
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13. Partnered with network operators globally
Hundreds of platforms certified and launched, worldwide
Deep knowledge about individual carrier’s unique requirements
Services offering and relationships to get OEM products certified
AirVantage M2M Cloud connected to operator infrastructure
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14. Sierra Wireless: The global leader in M2M
devices and cloud services
Trusted M2M partner of OEMs, enterprises, and network
operators around the world
#1 market share in M2M embedded modules
Over 50 million M2M devices shipped, blue-chip customer
base
$433M+ revenue, 850 employees, R&D on three continents
Financial strength: $188M cash, no debt
Leading innovation, comprehensive offering
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16. Record quarterly revenue in Q3
Revenue for Continuing Operations
($USD millions)
$109.6
$100.2
$112.3
$14.5
$16.4
12%
year-over-year
growth
Enterprise Solutions
$11.9
OEM Solutions
$88.3
Q3 '12
$95.1
$95.9
Q2 '13
Q3 '13
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17. Improving profitability
Non-GAAP* Operating Results for Continuing Operations
Gross Margin
(% of revenue)
Earnings from Operations
Adjusted EBITDA**
($USD millions)
($USD millions)
$5.9
33.4% 33.4%
31.1%
$4.9
$3.2
$2.4
$1.5
$0.3
Q3 ‘12
Q2 ‘13
Q3 ‘13
Q3 ‘12 Q2 ‘13
Q3 ‘13
Q3 ‘12
Q2 ‘13 Q3 ‘13
* Non-GAAP results exclude the impact of: stock-based compensation expense, acquisition and disposition costs, acquisition amortization, impairment, integration
costs, restructuring costs, foreign exchange gains or losses on foreign currency contracts as well as on translation of balance sheet accounts, and certain tax
adjustments.
** Adjusted EBITDA as defined equates to earnings (loss) from operations plus stock-based compensation expense, acquisition costs, restructuring costs, integration
costs, impairment and amortization.
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18. Strong cash position and debt free
Cash, Cash Equivalents
& Short-Term Investments
($USD millions)
$176.6
$188.4
• Cash generated in Q3: $11.8 million
– Cash from operations: $19.1 million
– Capital expenditures: $4.4 million
– Cash used in financing and other
activities: $2.9 million
Q2 '13
Q3 '13
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19. Financial guidance summary
Non-GAAP* Financial Guidance for Continuing Operations
($USD millions, except EPS)
Q4 2013
Guidance
Revenue
$112.0 to $116.0 million
Earnings from operations
$2.4 to $3.3 million
Net earnings from continuing operations
$2.2 to $3.0 million
Earnings per share
$0.07 to $0.10 per share
Financial guidance excludes any impact from the acquisition of the
M2M module and modem assets of AnyDATA
* Non-GAAP results exclude the impact of: stock-based compensation expense, acquisition and disposition costs, acquisition amortization, impairment, integration
costs, restructuring costs, foreign exchange gains or losses on foreign currency contracts as well as translation of balance sheet accounts, and certain tax
adjustments
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21. Automotive
Typical applications
Sample Customers
Market Dynamics
Market Size
Crash Safety (eg. eCall)
18M
(unit shipments)
3M
Telematics & Navigation
CAGR
58%
Source: ABI
2011
2015
Market demand drivers:
Regulation
Increasing post‐crash survival rates
In Vehicle Internet
Regulation & Consumer Pull
Tracking stolen vehicles
Consumer Demand
In vehicle comms & entertainment
Tier 1
OEM
Market moving to higher bandwidth requirements for internet, entertainment, etc…
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22. Transportation
Typical applications
Sample Customers
Stolen Vehicle Tracking
Market Dynamics
Market Size
28M
(unit shipments)
10M
Fleet management
CAGR
31%
Source: ABI
2011
2015
Market demand through efficiency
Fleet & collection efficiency
eToll & eTax Collect
Less fuel/CO2, shorter routes, faster
deliveries, road toll revenue
Personal & business road assets
Stolen vehicle recovery, insurance
premiums tuned, on‐road efficiency
and pay‐as‐you‐drive insurance, ITS (Intelligent Transport Systems), etc…
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23. Energy
Typical applications
Sample Customers
Market Dynamics
Market Size
Electricity – Gas – Water
15M
(unit shipments)
7M
Smart Metering
CAGR
22%
Source: ABI
2011
2015
Demand drivers: regulation, grid
efficiency, social conscience
Energy Efficiency ‐ Green Energy
Transmission &
Distribution
CO2 emissions targets, smart grid: load
management/optimization, grid
contribution by consumer
Renewable Energy
EV Charging Station
Consumer monitored energy
Web based home monitoring
EDMI and Sierra Wireless awarded for
the best innovation for Utilities
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24. Industrial & Infrastructure
Typical applications
Sample Customers
Market Dynamics
Market Size
Industrial Automation
5M
Infrastructure / Building
Monitoring
Digital Signage
12M
(unit shipments)
CAGR
21%
Source: ABI
2011
2015
Demand drivers: regulation, grid
efficiency, social conscience
Energy Efficiency ‐ Green Energy
CO2 emissions targets, smart grid: load
management/optimization, grid
contribution by consumer
Consumer monitored energy
Web based home monitoring
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25. Security
Typical applications
Sample Customers
Premise Monitoring
Market Dynamics
Market Size
11M
(unit shipments)
CAGR
32%
4M
Personal Security
Source: ABI
2011
2015
Market demand drivers:
Consumer pull
Video Surveillance
Protecting homes and loved ones
Business pull
Protecting premises and assets
Anti‐terrorism
Protecting citizens
and criminal trackers, high value asset tracking and much more…
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26. Networking
Typical applications
Business Continuity
Sample Customers
Market Dynamics
Market Size
9M
(unit shipments)
5M
CAGR
12%
Source: ABI
2011
SMB & Residential
2015
Market demand through
Broadband proliferation
3G and LTE technology provide rich end
user experience or monitoring for large
media applications
Internet access 24hr/24hr
Area and service provider provisioning
access without adequate wireline
infrastructure or landline back‐up
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27. Sales & Payment
Typical applications
Point of Sale
Sample Customers
Market Dynamics
Market Size
4.1M
(unit shipments)
2.5M
ATM & Cash Registers
CAGR
13%
Source: ABI
2011
2015
Market driven by “cashless” society
Convenience & security
Vending
Pay for anything, anytime, anywhere,
securely.
Government regulation
Electronic VAT collection to avoid fraud.
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28. Field Service
Typical applications
Public Safety
Sample Customers
Market Dynamics
Market Size
2.7M
(unit shipments)
1.6M
Utility
CAGR
15%
Source: ABI
2011
2015
Market driven by efficiency
Mission critical
Consumer
Prevent downtime, diagnose and fix
issues. Support incident and disaster
management.
Labour & Time saving
Customer care, efficiency ,productivity,
location to reduce cost and enhance
productivity.
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29. Healthcare
Typical applications
Medical
Sample Customers
Market Dynamics
Market Size
(unit shipments)
3.8M
CAGR
66%
Well Being
0.5M
Source: ABI
2011
Sport & Fitness
2015
Market driven by
Cost models and payment structure
To support the industry
Wireless and Telemedicine services
Curbing health expenditure and
enabling new ways to manage
health, disease and life‐style
Well being monitoring sub‐segments: Diabetes, Cardiac, Blood Pressure, Sleep,
Home medical hub,...
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