Welcome. Edwin A. Guiles Lead Independent Director, Cubic Corporation Board of Directors

Transcription

1 Welcome Edwin A. Guiles Lead Independent Director, Cubic Corporation Board of Directors

2 Global Provider of Market-leading, Innovative Solutions 6 Sales $1.1 billion 5,500 employees Prime contractor on 90%+ of sales Transportation Systems Leading integrator of payment systems and intelligent travel solutions Mission Solutions Leading provider of expeditionary communications solutions Defense Training Leading provider of defense training systems

3 Strong Leadership Team 7 Bradley H. Feldmann Chairman, President and CEO 30 years experience leading strategic and operational transformations Anshooman Aga EVP and CFO 20 years financial leadership experience driving profitable growth and financial discipline across businesses globally James R. Edwards SVP and General Counsel Seasoned legal and compliance executive with 40+ years experience in defense and technology industries Matthew J. Cole, SVP and President Cubic Transportation Systems Recognized industry thought leader with 15+ years experience globally and across most functions in the business Michael R. Twyman, SVP and President Cubic Mission Solutions Leader of Cubic s C4ISR strategy and a 30-year veteran in the defense industry David H. Buss, SVP and President Cubic Global Defense Brings deep expertise in military training; Retired from the U.S. Navy as a Vice Admiral after 36 years of service

4 Strategy Update Bradley H. Feldmann Chairman, President & Chief Executive Officer

5 Our Common Mission and Technologies Cubic is a market-leading technology provider of integrated solutions that increase situational understanding for transportation, defense C4ISR and training customers worldwide to decrease urban congestion and improve the militaries effectiveness and operational readiness. Cyber Management 9 Instrumentation Secure Network Communications Cloud Computing Algorithms / Simulation Data Visualization Power Management

6 Strong, Global Portfolio Serving Attractive Markets 10 Diversity of Sales: $1.108b (fiscal 2017) 15% Transportation Defense Training 52% Mission Solutions 33% 10% 7% U.S. U.K. 16% 47% Australia 20% Middle East / Far East Canada / Other Transportation Systems Urbanization Reduce congestion Reduce collection cost Market Tailwinds Improve operations and utilization Predictive, personalized and actionable traveler Mission Solutions Insatiable appetite for Full Motion Video Complex threat $12b market $2.4b market Size, Weight and Power (SWaP) advantage ~5% 5yr cagr ~10% 5yr cagr 38% 62% Products Services Defense Training Systems Complex threat Refocus on training and readiness Home base training $10.3b market ~3.5% 5yr cagr

7 Our Strategic Priorities 11

8 Goal 2020 Revenue & Profitability On Track 12 Pro Forma for Services Divestiture Goal 2020 Organic & Acquisition Potential $m 2017 Pro-forma Goal 2020 Organic Sales (prior to divestiture) $1,486 $2,000 Less: Divestiture ($378) ($450 - $500) Less: M&A (~$100) Revenue $m Organic Potential M&A $1,108 ~10% CAGR ~ $1,550 to $2,000 $100 to $550 ~12-22% CAGR $1,450 to $1,500 Organic Sales $1,108 $1,400 -$1,450 Adj. EBITDA Margin % (prior) Adj. EBITDA Margin % (new) 1 7% 10% 8% 11% to 12.5% ~ Top Organic Drivers New York Boston T2C2 Brisbane FIRSTNET Network Convergence P T2C2 = Transportable Tactical Command Communications. 1) Goal 2020 adjusted for 4.5% adj. EBITDA margin on the CGD Services divestiture and $8m of corporate overhead previously allocated to the divested business; Assumes adj. EBITDA margin on ~$100m of M&A of ~10%. See appendix for Goal 2020 revenue and projected profitability ranges by segment.

9 Winning The Customer 13 Named Supplier of the Year at the London Transport Awards Providing mobile solutions for top five U.S. metro agencies and AFC solutions to nine of the top ten 4C Strategies collaboration to provide scalable training solutions focused on customer outcomes Series of contracts to produce and enhance Air Combat Maneuvering Instrumentation (ACMI) for the F-35 T2C2 Full Rate Production (FRP) milestone Selected by ATT/Verizon for interoperability FIRSTNET solution Joint Aerial Layer Network selected for Joint Concept Technology Demonstration

10 Living One Cubic 14 Talented People Talent rotation program, high potential programs, and Cubic University Quarterly employee engagement assessment Talented All In employees Innovating Together IdeaSpark ideation and collaboration platform IRAD focused on winning technologies Culture of innovation and collaboration to solve complex customer challenges Better Systems Critical and transformational investments Consolidating systems using common processes Eliminated 100+ disparate IT systems Global team collaboration tool and competitive intelligence repository Scalable SAP platform (all data in one place) Reduces supply chain costs, overhead rates, and SG&A (~200 to 250 bps) Increases efficiency; reduces time to market Product Lifecycle Management tool will standardize engineering Stronger internal controls

11 M&A Strategy: NextCity, C4ISR and NextTraining 15 Transportation Serco - Traffic management systems for controlling urban and interurban road networks NextBus - Real-time passenger information C4ISR Beatty 1 - Secure, cloud operating systems technology MotionDSP - Real-time video enhancement / analytics Vocality - Optimizes communication paths and consolidates DTECH supply chain GATR - Inflatable, ultra-portable satellite communications antenna TeraLogics Full motion video platform DTECH - Ruggedized modular cloud-computing Defense Training Deltenna - Wireless tactical comms. infrastructure Intific - Software and game-based solutions Our Focus Technology driven, market leading Aligned with strategy Meets financial hurdles NextCity mid-market solution tolling / congestion management C4ISR exploitation of full motion video command and control capabilities to further build out Cubic s mission chain NextTraining new technologies to deliver higher fidelity user experience at lower cost potential consolidation opportunities 1) Minority investment with purchase options

12 Our Transformation Cubic Strategy Founder-centric conglomerate Market-leading, technology-driven Relying on tradition Refreshed leadership, relying on metrics and performance Few technology breakthroughs every decade Innovation drives the company Business Model Internally-focused Customer-centric Delivering bespoke systems Information-rich, subscription-based platforms London driving company profits Good margins and growth across portfolio HR focused on transactions Developing talent Infrastructure Many silos poor communication One Cubic Hodgepodge of IT systems Scalable SAP GEM Workday Capital Allocation FROM TO Opportunistic Disciplined allocation of all discretionary spending Low-cost acquisitions M&A aligned with strategy $

13 Our Focus - Execution 17 Better leadership and common systems Leadership Incentives to drive execution Trained and certified Program Managers Business Model Delivering similar products versus bespoke systems Standardizing engineering IRAD developing and proving out winning technologies Discipline Greatly improved estimating process based on historical para-metrics Earned value and metrics management Tight requirements and scope management

14 Where We Go From Here 18 Value Continue Transformation / Build Scale From programs to platforms From collecting data to helping customers make inferences / decisions From delivering systems to subscription based pricing Execution & Optimization Deliver on record backlog Brisbane and Bay Area Divest CGD Services Optimize SAP / PLM Disciplined capital allocation Strong Growth & Higher Margins Continued execution Benefit from ERP investments Strong mid-term pipeline: CTS: Customer upgrades, targeted new cities, and adjacencies CMS: FIRSTNET, Network convergence CGD: F-35, Virtual, LTE on the move Robust Long-Term Opportunities CTS: NextCity 2.0 CMS: JALN, AISR, Network convergence CGD: Air-Ground LVC Integration and Training as a Service Strategic investments to build market-leading, technology-driven businesses Longer term

15 Our Compelling Company 19 Winning Innovations creating breakthroughs One Cubic, scalable infrastructure driving efficiencies 6/30/14 to 5/30/18 Fiscal YTD 5/30/18 CUB +59% +39% S&P % +8% Russell % +11% Relative stock price performance, 6/30/14 close to 5/30/