Methode Electronics (MEI) Sidoti September Small-Cap Virtual Conference summary

Key messages and transformation strategy

• The company is leveraging its 78-year history to drive a pivotal transformation for long-term value creation.

• Over 30 new program launches are planned for fiscal 2025 and more than 20 in fiscal 2026, testing organizational capabilities and focusing on quality and delivery improvements.

• Transformation emphasizes operational improvements, cost structure, global best practices, and cultural shifts to reward performance.

• Affirmed guidance for flat sales in fiscal 2025, with profitable organic sales growth expected in fiscal 2026.

• The executive team is being strengthened with a new CFO and CPO to support transformation and execution.

Business overview and market positioning

• Operates in automotive, industrial, and interface segments, with applications in user interface, LED lighting, power, and sensors.

• Fiscal 2024 sales exceeded $1.1 billion, with a balanced geographic presence and 54% from automotive, 33% industrial, and 13% other segments.

• Strategic global footprint supports a make-where-we-sell approach, with key centers in the US, Malta, China, Mexico, and Egypt.

• Diversified customer base includes global OEMs in transportation, construction, cloud computing, aerospace, and data networking.

• Over 7,500 employees and 700+ engineers worldwide.

Product and technology evolution

• User interface sales declined from 51% to 43% of total sales due to program sunsets; lighting sales rose from 28% to 35% with the Nordic Lights acquisition.

• Power distribution sales increased from 13% to 17% of total sales, driven by EV and cloud computing growth.

• EV applications represented 19% of total sales in 2024, expected to surpass 20% in 2025, with $771 million in EV awards since 2021.

• Solutions for electric vehicles span both user interface, lighting, sensors, power distribution, and battery modules.

• Power distribution is now over half of product sales into EV applications, marking a major shift in product mix.