Kimball Electronics (KE) investor relations material

Strategic focus and business overview

• Emphasis on complex, high-quality electronic manufacturing for medical, automotive, and industrial sectors, with a sharpened focus on medical verticals.

• Global operations span North America, Europe, and Asia, with an in-region manufacturing strategy and a new major facility in Indianapolis.

• Revenue projected at $1.5 billion for fiscal 2025, with strong company culture and long-term customer relationships highlighted as key strengths.

• Medical business has grown double digits for three consecutive quarters, with expectations for continued strong growth and margin expansion.

• 75% of customers have been with the company for over a decade, reflecting high customer retention and partnership focus.

Medical segment growth and differentiation

• Medical CMO (contract manufacturing organization) is the primary growth engine, leveraging cash flow from automotive and industrial segments.

• Indianapolis facility specializes in finished medical devices, including drug delivery and surgical products, with FDA qualification and high-quality standards (99.999%).

• Product focus includes respiratory care, drug delivery, surgical devices, AEDs, and patient monitoring equipment.

• Ability to handle drug-device integration is a key differentiator, enabling direct drug insertion and shipment for pharma partners.

• Medical CMO offers higher margin potential due to complexity, quality, and regulatory requirements, making it a sticky business.

Growth strategy and M&A priorities

• Aggressive growth targeted in medical and industrial, with automotive expected to remain flat; medical is set to become the largest vertical over time.

• Capital is being redeployed into medical, with both organic and inorganic (M&A) opportunities under consideration, especially in the U.S. and Europe.

• M&A strategy seeks to add manufacturing capabilities, expand customer base, and enter new geographies or end markets, with a focus on adjacencies and tuck-in acquisitions.

• Facility in Indianapolis is positioned to serve new and expanding customers, with significant capacity for future growth.

• End market research is a prerequisite for major investments, ensuring alignment with customer demand and market trends.