2018 investor day
TRANSCRIPT
1
2018 Investor DayGeospatial Reporting SegmentRon Bisio
2
Trimble differentiation in Geospatial
• Transforms the full lifecycle• Creating the digital model of the physical earth• Software enables an ecosystem that creates customer value and builds
competitive moats
• Built around end-users• Diverse end market exposure• Driving replacement cycle of surveyor technology
• Technology innovation drives growth• Source of Trimble innovation in positioning, visualization and orientation technologies • Source of Trimble innovation in automation and autonomy
3SW, Services, Recurring refers to software, services and recurring revenues. Recurring revenue includes subscription, maintenance and support revenues. Software & services includes perpetual licenses and professional services.Addressable market refers to the total potential market size for technology, and is comprised of those users that have the potential to be addressed by Trimble and its competitors. Addressable market is based on internal estimates.Penetration refers to the current market penetration of technology, and represents Trimble revenue + competitor revenue as a percent of the addressable market. Penetration is based on internal estimates.Note: a reconciliation of non-GAAP financial measures to the comparable GAAP results can be found on the investor relations website at www.trimble.com.
Market size
• Revenue: $659 million
• Revenue growth rate: +4%
• Non-GAAP operating margin = 19.6%
Segment financials (2017)
Revenue mix (2017)
Business mix Geography
HW/SW/Recurring
• Total addressable market: $5 billion
• Global penetration <50%
Software, Services
Go-to-market
Geospatial reporting segment overview
Hardware
Software, Services
Recurring
North America
Europe
Asia-Pacific
Rest of World
Surveying
Autonomy
OEM
<15% OEM
>85% End-user / aftermarket
4
Physical to digital
• Market leading, highly accurate solutions for the measurement and digitization of our 3D world by focusing on an ecosystem tailored to the needs of our global, multi-disciplined customer base
Terrestrial, Aerial, Mobile Mapping
Industry challenges
• Increasing demand for decision making with a geospatial context
• Continued pressure for timely and accurate data
• Need to deliver answers from disparate data sources
Geospatial context is transforming industries
5
Trimble integrates physical to digital workflows
Terrestrial Aerial Mobile mapping
6
• Emerging businesses
• Geographic expansion
• Enterprise sales
• Large projects
• Penetration/share of wallet
• Technology integration
• Technology extension
• Leverage domain, channel, brand• Humility and caution
Ne
wEx
isti
ng
PR
OD
UC
TS /
TEC
HN
OLO
GIE
S
Existing New
INDUSTRY/GEOGRAPHY/CUSTOMERS
Driving innovation across the Geospatial Ecosystem
Expanding into under penetrated emerging
markets
Pursuing autonomous vehicle opportunity across development, prototyping
and production phases
Growth through focus on end market needs
7
Innovating to drive technology replacement cycle
Integrated surveying
• Enabling surveyors to diversify by offering scanning and image collection services to their customers
• Driving innovation increases the replacement cycle and the addressable market
• Integrated surveying and scanning solutions are highly leveraged by Trimble Building and Infrastructure business
8
Growing software revenueand evolving to the cloud
• Customers benefit from integrated field and office software, positioning services and industry-leading GNSS
• Domain-rich software, positioning services and a global distribution network provide a significant barrier to entry for low-cost GNSS competitors
• Integrating UAV, mobile mapping and traditional survey data into a single software/cloud-based workflow dramatically improves productivity
Geospatial field & office software ecosystem buildscompetitive moats
9
Trimble solution range maps to commercialization stage of autonomy efforts
Autonomy opportunity
• Mobile mapping solutions to precisely capture road infrastructure
• Inertial, OEM and correction services well positioned as autonomy evolves through test/development and prototyping phases into production roll-out
Innovation in autonomy: opportunity spans from capture of road corridor infrastructure to critical enabling technologies
10
Growth example: emerging markets provide significant potential
Emerging markets
• Higher addressable market growth rates as new technology is adopted
• Pursuing opportunities with fit-for-market solutions, pricing and distribution network
• Leveraging dual brand strategy as a gateway to the Trimble brand
11
Case study: one of North America’s largest surveying & engineering companies is leveraging Trimble cloud solutions to optimize surveying operations
Customer requirements Trimble value delivery
• Drive consistency across hundreds of field crews across the country
• Increase deliverable quality and decrease time to deliverable
• Automate repetitive tasks and alerting office personnel to potential data issues
• Cloud-based transfer of data between field and office
• Movement of manual desktop software processes to the cloud
• Custom workflow definition to facilitate automated QA and data preparation
12
• Technology penetration
• Geographic expansion
• Integrated offerings
• Account management
• Recurring/subscription SW model expansion
• Innovation (e.g., autonomy)
Large and global addressable
markets…
…with attractive set of growth drivers
Surveying &mapping
Autonomy OEM+ + Geospatial=
…enables Trimble to outperform underlying industry growth
The addressable market opportunity in Geospatial is compelling
Addressable market refers to the total potential market size for technology, and is comprised of those users that have the potential to be addressed by Trimble and its competitors. Addressable market is based on internal estimates.Penetration refers to the current market penetration of technology, and represents Trimble revenue + competitor revenue as a percent of the addressable market. Penetration is based on internal estimates.Source: Company analysis.
$4B <$1B $1B $5B
13
<50%
Addressable market refers to the total potential market size for technology, and is comprised of those users that have the potential to be addressed by Trimble and its competitors. Addressable market is based on internal estimates.Penetration refers to the current market penetration of technology, and represents Trimble revenue + competitor revenue as a percent of the addressable market. Penetration is based on internal estimates.Source: Company analysis.
AutonomySurveying OEM
New product categories(e.g., SX10)
Optical,GNSS Receivers, GIS
Embeddedtechnologies
AutonomyNew product categories
Network effect opportunities
• Software:hardware
• Digital:physical
• Office:field
• Integratedofferings
Global
GlobalEmbedded technologies
Global
Inertialtechnologies
Optical, GNSS Receivers, GIS
Developed economies
Rest of world
Low technology penetration
Geographic penetration opportunity
+<25% <75%
<75%
<75% <50%
Significant penetration opportunity in Geospatial
<50%
<50%
<33%
<33%
14
Joint ventures & dealer partnerships
Interoperability
Direct sales & e-commerce
Market reach: unmatched scale and scope
~200Distribution
partners
15
Trimble differentiation in Geospatial
• Transforms the full lifecycle• Creating the digital model of the physical earth• Software enables an ecosystem that creates customer value and builds
competitive moats
• Built around end-users• Diverse end market exposure• Driving replacement cycle of surveyor technology
• Technology innovation drives growth• Source of Trimble innovation in positioning, visualization and orientation technologies • Source of Trimble innovation in automation and autonomy
16
2018 Investor DayBuildings & Infrastructure Roz Buick, Ph.D.
17
• Transforms the full lifecycle• Plan design engineer estimate construct operate• Uniquely connecting digital and physical worlds• Impacting hundreds of billions in capital projects and millions of users
• Built around end-users• >95% end-user revenue; <5% OEM revenue• Serving the “mixed fleet” globally• Delivering productivity within tasks and across systems
• Technology innovation drives growth• More than 50% software, services and recurring revenue• $17B addressable market with low penetration and attractive adjacencies
Trimble differentiation in Buildings and Infrastructure
18SW, Services, Recurring refers to software, services and recurring revenues. Recurring revenue includes subscription, maintenance and support revenues. Software & services includes perpetual licenses and professional services.Addressable market refers to the total potential market size for technology, and is comprised of those users that have the potential to be addressed by Trimble and its competitors. Addressable market is based on internal estimates.Penetration refers to the current market penetration of technology, and represents Trimble revenue + competitor revenue as a percent of the addressable market. Penetration is based on internal estimates.Note: a reconciliation of non-GAAP financial measures to the comparable GAAP results can be found on the investor relations website at www.trimble.com.
Market size
• Revenue: $829 million
• Revenue growth rate: +12%
• Non-GAAP operating margin = 21.2%
Segment financials (2017)
Revenue mix (2017)
Business mix Geography
HW/SW/Recurring
• Total addressable market: $17 billion
• Global penetration <33%
Go-to-market
Buildings and Infrastructure reporting segment overview
Building Construction
Civil Engineering & Construction
Hardware
Software, Services
Recurring
North America
Europe
Asia-Pacific
Rest of World
<5% OEM
>95% End-user / aftermarket
19
Large, siloed and inefficient Skilled labor shortages
Poor communication, planning and collaboration
Increasing technology, acceptance and ubiquity
The construction industry is transforming
20
CONNECTED
CONSTRUCTION
Mixed fleet & interoperability
• Machines & vehicles
• Tools
• Labor
• Interoperable models
Customer ROI
• Task productivity
• System productivity
• Quality
• Safety
• Visibility
• Sustainability
Connected construction integrates workflow and stakeholders
21
Own, operate& maintain
Fabricate & construct
Schedule & project manage
Design & engineering
Estimate, bid & award
Procure & deliver
Plan & feasibility analysis
To connect construction we serve the entire lifecycle
22
Trimble constructible models transform workflow
23
Machine control Labor, equipment and materials management
Accurate layout Production tracking
Inspection Quality assurance
Field workflows — do the work & capture progress
24
One-Stop-Shop for General Contractors, Civil and Sub-Contractors
Arch.
Sub.
PM
Office
Team
CFO
OwnerEngineer Super QA
“Serial Owners” and enterprise General Contractors demanding dedicated project management software
Owner solutions Construction management systems
Program Management
Platform
Planning
Operations
Construction Procurement
Design
Field
Project management and controls for owners & contractors
25
Between stakeholdersOwner ⇔ architect-engineer ⇔General contractors ⇔ sub-contractors
In the officeBusiness ⇔ project/team ⇔ fieldBetween departmentsBuilding product manufacturer supply
In the fieldScope ⇔ actual ⇔ handover Labor ⇔ equipment ⇔materialsModels/production vs. documents
Reporting
Procurement
Job Cost
Scheduling Labor
Material
Equipment
Instrument
Supervise
FabricationPre-fab
Project capital program management
Project document & contracts management
Production schedule, work order mgmt
as-built QA
Trimble connected construction delivers systemproductivity by optimizing project delivery
26
Transforms task / system productivity while enabling a project performance ecosystem
Conceptual plan Design & engineering Estimate & procure Fabricate & construct
Electrical
model
Structural
model
Mechanical
model
Detailed
AE model
Trimble Connect
> 1 million users > 60 integrations
Trimble connect streamlines coordination
27
20% improvement
in excavation productivity
Improving productivity
“The system worked great from the first day. It is amazing for what it can do all around.”
Rock Structures Utility & Excavating
“With this system, you don’t have to slow down [to hit grade]. It will make our operators at least 20% faster.”
Beaver Excavating 40% to 50% faster
with Trimble Earthworks
+ improved accuracyfinal grade to 3/10”
reduces over-excavation
and yields 50% less
backfill
Our value is transformative to the client’s business
28
15%productivity hike in concrete rebar
”Partnering with Trimble is instrumental in helping us achieve our efficiency goals.”
Barton Malow Company
Over 90% fabricated offside
50% less labor required
Over $1M costs savings
”There is a real need for intelligent, fabrication-ready models that have the actual system components included.”
North Mechanical Contracting
Our value is transformative to the client’s businessImproving productivity
29
33% reduction
in wasted material
”Trimble software has enabled us to reduce concrete waste by 33%.”
Haselden Construction
Efficiency through integrated workflowsOur value is transformative to the client’s business
$100 million Project Cost Savings
“e-Builder has made it much easier to coordinate schedule and manage the program. In short, everything is handledthrough e-Builder on thisProgram.”
Inova
30Addressable market refers to the total potential market size for technology, and is comprised of those users that have the potential to be addressed by Trimble and its competitors. Addressable market is based on internal estimates.Penetration refers to the current market penetration of technology, and represents Trimble revenue + competitor revenue as a percent of the addressable market. Penetration is based on internal estimates.Source: Company analysis.
Large and global addressable
markets…
…with attractive set of growth drivers
+ + Construction=
• Technology penetration
• Geographic expansion
• Integrated offerings
• Account management
• Recurring/subscription SW model expansion
• Innovation
BuildingConstruction
CivilConstruction
Program / Project
Management
…enables industry outperformance scaling from marketleadership position of > $1B in revenues
Trimble + e-Builder + Viewpoint
The addressable market opportunity in Buildings & Infrastructure is compelling
$8B $4B $5B $17B
31
<50%
<50%
<25%
<25%<25%
Low technology penetration
Geographic penetration opportunity
Addressable market refers to the total potential market size for technology, and is comprised of those users that have the potential to be addressed by Trimble and its competitors. Addressable market is based on internal estimates.Penetration refers to the current market penetration of technology, and represents Trimble revenue + competitor revenue as a percent of the addressable market. Penetration is based on internal estimates.Source: Company analysis.
+
Building construction
Civil construction /machine control
Building and civilconstruction
ExcavatorDozers /graders
Program / projectmanagement
Constructible model
Dozers / graders
Network effect opportunities
• Software:hardware
• Constructible BIM
• Digital:physical
• Office:field
• Integrated offerings
Global
N. America/Australia
Rest ofworld
Program / project management
Global
Constructible model
Excavator
Global
<25%
<25%
Low penetration in Buildings and Infrastructure provides upside
<33%
<50%
<50%
32
Technology innovation in Buildings & Infrastructure
33
~500Direct sales personnel
~50%Revenues by
e-commerce B2B +B2C
~120 Dealer partnerships
Joint ventures & dealer partnerships
Interoperability
OEM relationshipsfor mixed fleet
Direct sales & e-commerce
Market reach: unmatched scale and scope
34
$
$
10,000+ contractors rely on Trimble field technology
Specialty contractors
500,000+ heavy equipmentwith Trimble technology
Equipment & field Operations
$300 billion and 250,000 capital projects managed with Trimble
Architect - engineer - general contractor
Owner
Trimble can connect:
5 million+ people using Trimble software for design & construction
• Physical & digital worlds
• Construction supply chain from owner to general contractor to specialty contractor
• Automate payments & progress measurement from owner to GC to operator paycheck
Connected construction network effect opportunity :unmatched ecosystem coverage
35
• Transforms the full lifecycle• Plan design engineer estimate construct operate• Uniquely connecting digital and physical worlds• Impacting hundreds of billions in capital projects and millions of users
• Built around end-users• >95% end-user revenue; <5% OEM revenue• Serving the “mixed fleet” globally• Delivering productivity within tasks and across systems
• Technology innovation drives growth• More than 50% software, services and recurring revenues• $17B addressable market with low penetration and attractive adjacencies
Trimble differentiation in Buildings and Infrastructure
36
2018 Investor Daye-Builder OverviewRon Antevy
37
e-Builder company overview
Cost & schedule overruns
Manual processes
Limited transparency
Poor stakeholder integration
Uninformed decisions due to disparate data
Process inconsistency
Common business challenges
Program Management
Platform
Business results
Optimized productivity & efficiency
Reduced costs &higher profitability
Improved risk management & compliance
Increased automation & lowered cycle times
Enhanced collaboration & communication
Capital program management improves project outcomes through better visibility and process control
38
2017 Business profile (Pre-Trimble)
>25%5 Yr. revenue
CAGR
Based in Florida, USA
with 230+ employees
~$53M2017
Revenue
>25%2017
EBITDA
105%Net
retention
>65%SaaS revenue
1995: Founded with Jon Antevy’s Master’s thesis
2002: Focus shifts to owners
Early yrs. (‘95–‘05)$2.2MFY 2005A
Revenue
Growth (‘06–’17)$53M
FY 2017A
Revenue
2001: Profitable
2017: North America leading
owner PMIS
$300B+Projects
managed
>100,000Users
e-Builder company history & business profile
39
Extend customer reach with Trimble
Richer value proposition with Trimble constructible
model and field technologies
Compelling possibilities with Viewpoint workflows
• International markets, large general contractors, State Departments of Transportation
• Owner influence on contractor technology selection
• Accelerate payments and reduce change order risk
• Real-time progress data and early issue detection
• Improved efficiency between project participants reduces cost and schedule
• Reduce risk and increase transparency by eliminating duplicate data entry
• Accelerate time to payment for the contractor while reducing risk and cost for the owner by providing accurate project progress and financial data
Compelling growth opportunities
40
Construction productivity through office, team and field Integration
vs.
× Distributed & complex workflows create inefficiencies, resulting in project delays
× Lack of collaboration between contractor, project team, and job site
× Disparate, manual processes and workflows
× Prone to significant error and information loss
Key issues
Connects data and workflows, between office, team, and field
Collaborative solutions connect contractor HQ, project team, and job site
Enables productivity and minimizes errors
Project transparency leads to faster results
One central platform for all workflows
Owner
Sub.
Arch.
Super
Project Manager creates change order
PM
Send
s cha
ng
e ord
er via
ema
il to o
wn
er
Calls subcontractor on change order request
Foreman emails Engineer, who accidentally deletes message
Owner does not respond to change order request
Architect sends new drawings via email
Emails PM to request update for Sub
Key benefits
Arch.
Sub.
Engineer
PM
Office
Team Field
Super
CFO
QA
Executive and business mgmt. Team Project ecosystem incl. owners & subs Field Job site project resourcesKey:
BEFORE
Disconnectedworkflow
AFTER
Integrated workflow
with Viewpoint
Engineer
Owner
Office
41
Viewpoint at a glance
1. Excludes the impact of fair value accounting of Viewpoint’s deferred revenue.; 2. Reflects addressable market; 3. Source: Viewpoint internal construction volume analysis.; 4. Dollar retention on North American office solutions (Vista and Spectrum). Represents increased revenue from customer upsells and price increases, less reduced revenue from churn.; 5. Recurring revenue includes SaaS, maintenance, and hosting revenue.; 6. Source: Viewpoint.7. Reflects Team, Field, and Cloud ERP solutions as of February, 2018.; 8. Represents year over year growth from Q1 2017 to Q1 2018 of SaaS bookings.; 9. Reflects named customers of the flagship Vista and Spectrum product lines.
Company overview Key business highlights
≈$200M2019P non-GAAP revenue1
>$50M2019P Operating cash flow
≈$3B+Market opportunity2
>$250B+Construction volume3
≈105%+Net dollar retention4,6
≈70%Recurring revenue5,6
≈8,000Customers worldwide6
420,000+Total users6,7
128%SaaS bookings growth6,8
>95%Customer retention6,9
▪ 40+ year history exclusively focused on construction software
▪ Provides the industry's only construction management solution for multiple verticals that links pre-construction, operations, accounting and resource management, project team collaboration and mobility
▪ Natively integrates customers’ field and projects with back office controls for full project visibility
▪ Deeply embedded solutions, serving contractor workflows across General Contractors (GCs), Heavy Civil Construction, and Specialty Contractors (e.g. mechanical, electrical, and plumbing (MEP))
▪ Unique scale and market presence across all construction verticals with 46% customer penetration into ENR400 (largest GC’s) and 34% customer penetration into ENR600 (Largest MEPs and Specialty contractors)6
42
Compelling growth opportunities
Extend customer reach with Trimble
Richer valuation proposition with
Trimble constructible model and field
workflows
International expansion
Share of wallet from integrated solutions that connect Trimble field activities to financial tracking of contracts, resources and costs in Viewpoint
Interoperability: Trimble estimating and content-enabled procurement with Viewpoint financial, MRP, and project management
Integration: Viewpoint project and financial controls with Trimble labor, equipment and materials tracking to optimize equipment utilization, labor workforce management, resource availability and cost allocations
Collaboration: Viewpoint workflows in Trimble Connect for lifecycle collaboration
Data transparency provides Owners with near real time visibility into project progress and delivery, including progress to budget
Data transparency enables network effects by driving bilateral (contractor/owner) demand for Viewpoint and e-Builder solutions
Compellingpossibilities with
e-Builder workflows
43
44
Why Trimble?
accelerates vision ideal cultural fit