Belden (BDC) targets long-term mid-single-digit annual revenue growth

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.

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