9.22.10 ADT Boca Site Visit

Transcription

September 22, 2010

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Forward-Looking Statements / Safe HarborCertain statements in this presentation are ‘‘forward-looking statements’’ within the meaning of the U.S. Private Securities Litigation Reform Act of1995. All forward-looking statements involve risks and uncertainties. All statements contained herein that are not clearly historical in nature areforward-looking, and the words ‘‘anticipate,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘estimate,’’ ‘‘project’’ and similar expressions are generally intended to identifyforward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or documents filed with theSecurities and Exchange Commission (‘‘SEC’’), or in Tyco’s communications and discussions with investors and analysts in the normal course ofbusiness through meetings, webcasts, phone calls and conference calls, regarding expectations with respect to sales, earnings, cash flows, operatingand tax efficiencies, product expansion, backlog, the consummation and benefits of acquisitions and divestitures, as well as financings andrepurchases of debt or equity securities, are subject to known and unknown risks, uncertainties and contingencies. Many of these risks, uncertaintiesand contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results,performances or achievements. Factors that might affect such forward-looking statements include, among other things:other capital market conditions, including availability of funding sources andcurrency exchange rate fluctuations;-availability of and fluctuations in the prices of key raw materials, includingsteel and copper;-economic and political conditions in international markets, includinggovernmental changes and restrictions on the ability to transfer capitalacross borders;overall economic and business conditions;-the demand for Tyco’s goods and services;-competitive factors in the industries in which Tyco competes;-changes in tax requirements (including tax rate changes, new taxlaws and revised tax law interpretations);-results and consequences of Tyco’s internal investigations andgovernmental investigations concerning the Company’s governance, management, internal controls and operations including its businessoperations outside the United States;the outcome of litigation and governmental proceedings;effect of income tax audit settlements;the ratings on our debt and our ability to repay or refinance ouroutstanding indebtedness as it matures;-1--the ability to achieve cost savings in connection with the company’srestructuring initiatives;potential impairment of our goodwill and/or our long-lived assets;the impact of fluctuations in the price of Tyco common shares;risks associated with the change in our jurisdiction of incorporation fromBermuda to Switzerland, including the possibility of reduced flexibility withrespect to certain aspects of capital management, increased or differentregulatory burdens, and the possibility that we may not realize anticipatedtax benefits;-our ability to operate within the limitations imposed by financingarrangements and to maintain our credit ratings;-interest rate fluctuations and other changes in borrowing costs;-changes in U.S. and non-U.S. government laws and regulations; and-our ability to execute our portfolio refinement and acquisitionstrategy, and our ability to integrate acquired businesses;-the possible effects on us of pending and future legislation in the UnitedStates that may limit or eliminate potential U.S. tax benefits resulting fromTyco International’s jurisdiction of incorporation or deny U.S. governmentcontracts to us based upon Tyco International’s jurisdiction of incorporation.Tyco is under no obligation (and expressly disclaims any obligation)to update its forward-looking statements.John B. KochPresident , ADT North AmericaResidential/Small BusinessSeptember 22, 20101

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010ADT North America Residential & Small BusinessAt A Glance(2009 Year End Results; in millions)ADT NAResidential &Small BusRevenuei%RRecurringOperating Incomebefore special items*Operating margin*%BroadviewPro-formaCombined** 2,248 565 2,81386%94%88% 552 101 65324.6%17.9%23.2%EBITDAbefore special items* 1,123 259 1,382EBITDA margin* %50.0%45.8%49.1% Clear #1 in a Fragmented Industry– 6.3M Customers ( 5X Larger than Nearest Competitor)– 26% Market Share Growing and Profitable Subscriber-Based Business Model3*Operating income, operating margin, EBITDA and EBITDA margin before special items are non-GAAP measures.**Does not include adjustments for expected synergies or any other adjustments to Broadview’s historical data.In The Subscriber-Based Model, PerformanceIs Driven By Four Key FactorsDefinitionAccount GrowthRateSAC(SubscriberAcquisition Cost)RPU(Revenue Per User)UserDisconnectRateCustomer additionsFocus Areas Multi-channel strategy Sales force reach andeffectivenessCosts to establish customer(e.g. install, sales/marketing) Cost effective lead generation Balancing Direct andDealer modelsMonthly revenue generatedper accountp Increasing RPU throughexpansion of offerings ADT PPulsel% of recurring revenue lost Differentiated customer service Contract length and renewalManaging The Relationship Throughout The Customer Lifecycle42

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010North America Residential Gross Account Adds(Excluding Broadview)743554572FY07FY08567000’s496FY09YTD FY09YTD FY10Continued Growth Despite Difficult Environment5InstaallRevennue Continuing to work with OEMs to reduce equipment cost Driving installation productivity through processoptimization and improved product designs Optimization of marketing spend to reduce cost per lead(pricing and channels)UpfrontUInvvestmentSubsccriber Acquisition CosstSelect Subscriber Acquisition Cost Improvement Efforts Sales force productivity programs (improved close rates,increased self-generated leads) Targeted product offerings Dedicated Resale sales force Balancing channel mix, direct and dealerTaking A Cross-Functional Approach To SAC Improvements63

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010While Revenue Per User For TraditionalSecurity Services Continues To Increase Monthly Revenue Per New Residential Customer 40 38 36 34 32 30 28 26 24 222003200420052006200720082009Base Burglar Alarm (B.A.)QSP MaintenanceSmoke / Heat / COFlood / TempTwo Way VoiceCellguard (Cellular Backup)VideoViewOtherSteady, Sustained RPU Growth From New Residential Customers7 Our Expansion Into Interactive ServicesShould Fuel Continued Growth In RPU Interactive Services2010 Security IndustryPast 20 Years Intrusion Detection Fire/Smoke Detection Carbon MonoxideDetection Flood Detection8 Security Gateway Hub Connects Alarm Panel &Interactive Services PeripheralsBroadband / GSM (cell)Security Control / Digital Picture FramePremise Control and Live Camera FeaturesInternet Widgets (Traffic and Weather)Z-way: Lamp Modules, Thermostats, Locks, GarageDoorsAdding Lifestyle to Life Safety4

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010 And Work To Keep Customers For A LongerPeriod Of TimeRolling 12-Month Net Attrition14.0%13.5%13.0%12.5%12.0%4Q'07 1Q'08 2Q'08 3Q'08 4Q'08 1Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10Attrition Improvement Key Focus Areas pg of ppImprovedinitial screeningprospectsand accounts Dedicated “save desks” and support teams; overarching CustomerExperience team to drive proactive retention efforts Risk modeling of installed base (with specific programs for high riskpopulations) Customer “welcome calls” and ongoing surveys Developing “model service call” format9Strong Performance Improvements Yield AnAttractive Economic ModelRevenueUpfrontUInvvestmentSubsccriber Acquisition CostCash Economic Model – Customer Portfolio0101RevenueCost to Serve*Cumulative Cash Flow*Cash Break - Even Point*2345678910Years* Includes only incremental costs associated withgenerating a portfolio of recurring revenue customers.5

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Why We Like The Broadview Security Acquisition Exceptional business fit Increases our North American residential and small businessrevenue to 2.8 billion; over 85% recurring revenue Adds strong new account generation capabilities to ADT Combination will result in enhanced service offerings forcustomersgy gg on dayy one Significantsynergiesstarting Expected to be 0.10 accretive* to earnings in FY2011 ( 0.18accretive* on a cash basis)Will Generate Solid Long-Term Returns For Our Shareholders11* Accretive before special items; which include transaction related expenses.How Do We Compare ADT NAResidentialBroadviewAccount GrowthRate4.4%4.4%SAC 900 1,200 34.85 32.5213.4%11.4%*(SubscriberAcquisition Cost)RPU(Revenue Per User)UserDisconnectRateBest Practices To Be Shared On Both Sides12* On a reported basis, Broadview’s disconnect rate was 8.2%. Adjusted for ADT’s methodology it is 11.4%.6

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010We Have Assembled a Strong Leadership TeamJohn KochPresidentDavid BleischVice PresidentGeneral Counsel(Interim)Steve GribbonGroup VPSalesStacey RapierVice PresidentHuman ResourcesKen PorporaVice PresidentFinanceShawn LuchtGroup VPOperationsDebbie WilsonVice President &CIODon BoeremaVice President &CMORamon GenemarasVice PresidentOperationalExcellenceCarole VanyoVice PresidentCustomerExperience13We Remain Committed to the “Best of Both”ApproachADTBroadviewProductPortfolio Interactive services Two-way voice capabilities Downloading capabilities Bmobile installation technologyMarketing Lower cost per lead Rebate/pricing structure Simpler core offeringsSales Higher RPU, lower SAC model Credit approval/resale process Takeover effectiveness Self-generated lead process Inspection & Builders programCustomerCare DealersD lwebb portalt l Better Interactive VoiceResponse (IVR) structure SiSinglel care/billing/billi queue Proactive one-call resolution Single install-to-cash system Centralized dispatch system, More effective remote serviceOperationswith automated optimization(fewer field calls)147

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Our Structured Program Management ApproachEnsures Delivery of Synergy Savings Dedicated Program Management Office with executiveoversight– BeganBduringd i iintegrationtti planningli– Continues during integration execution Lean/Six Sigma techniques with focus on business process Coordinated program milestones Detailed financial trackingg– By department– Synergies and Cost to Realize15Summary North America Residential / Small Business Security is anAttractive Sector– Although Capital IntensiveIntensive, Solid Business Model– Growth During the Housing Downturn and Recession withIncreased Growth Ahead– ADT is the Clear Market Leader The Broadview Integrationgis on track– “Best of Both” Approach will Improve the Customer Experience– Structured and Disciplined Integration Approach Will EnsureWe Deliver on Synergy Commitments168

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Don BoeremaVP & CMO, ADT North AmericaResidential/Small BusinessSeptember 22, 2010Our Expansion Into Interactive Services ShouldFuel Continued Growth In RevenueSecurity IndustryPast 20 years Intrusion Detection Fire/Smoke Detection Carbon MonoxideDetection Flood Detection18Interactive Services2010 Security monitoringConnectivity and controlEnergy managementHome managementBusiness productivityHome healthEntertainmentAdding Lifestyle to Life Safety9

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Companies Have Tried Without SuccessTHEN NOW WiredDisparate TechnologiesProprietary solutionsHigh-end ConsumersWirelessIntegrated TechnologiesOpen StandardsMass Market19The Central Control Platform forHome and Business ManagementSecurity Gateway Broadband / Cell Backup Connects to alarm panel keypad bus Connects Interactive Services peripheralsCustomerLaptopCMCTouchscreen Security Panel Control Premise Control and Camera features Internet Widgets (traffic, rPCWireless CamerasCustomerModem Video image / clip capture Live video viewiHubWave Automation Lamp ModulesDevices Thermostats Locks OtherWirelessCameraZ-Wave Home Control2010

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010ADT Pulse will Integrate With Numerous DevicesADT can integrate home control systems with zwave technologyGarage Doors21Supported with a Personalized Customer Portal2211

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Mobile Applications on All Mobile Platforms Remote Arm/Disarm Lighting management Temperature Control Live Video and snapshots2323New Customer Touchscreen with Content2412

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010ADT Pulse SolutionsADT Pulse SelectADT Pulse AdvantageADT Pulse Premier24/7 Intrusion & Fire Monitoring Remote Arm & Disarm / iPhone App Alerts & Event Notification Lighting and Climate Control/ZWaveVideo Touchscreen with Content QSP/P-QSP ADT Pulse is fully upgradable at any time25The New ADT Look and FeelConsumerBrochures:26Website:Residential & Business TV Ads:2613

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010ADT Pulse Internet Siteswww.ADTPulse.comwww.findyourpulse.com27Social Media and Mobile Advertising2814

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010ADTPulse iPhone Downloads Hundreds of ratings and reviewsSample Review: “Love this app and system. Thewait and price was right for beingable to set my home onschedules to arm, turn on/off, setthermostat and so much more.It’s kinda like the Jetsons hascome to life and this system isRosie :)” Tens of thousands of downloadsand leads29Driving the Pulse with Fresh Media & PublicRelations Secured coverage with influential lifestyle mediaincluding:–Family Circle (impressions: 15,293,012)–O, The Oprah Magazine (impressions: 9,590,788)–Glamnest com (impressions: 6,000,000)Glamnest.com6 000 000)–Womansday.com giveaway (impressions: 2,294,280)–Ebony Magazine (impressions: 4,679,480)–InStyle.com (impressions: 552,204)–People.com Pets (impressions: 315,523)Drove conversations with high profile technologymedia including:–Forbes.com (impressions: 9,017,870)–W ll StreetWallStt JournalJl (impressions:(ii22,092,523)092 523)–Wired (impressions: 743,476)––San Jose Mercury News (impressions: 516,701)CNET News.com (impressions: 517,061 )Obtained validation from technology analyst–“The upside for ADT Pulse is fairly high with goodmargins for both the devices and the services”--------- Jonathan Gaw, IDC3015

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Scott M. ClementsPresidentTyco Retail SolutionsSeptember 22, 2010What is Tyco Retail Solutions?Helping retailers be more profitable byreducing theft, enhancing safety and security,and improving operational efficiency and growth potential. 1 billion, industry leader dedicated to the global retail vertical 40 years of proven experience keeping millions of people safe in 70countries around the world 80 billion items protected against theft in the last decade 4,500 employees around the globe, with unique global service deliverycapabilities 80% of the global top 200 retailers rely on Tyco Retail Solutions Industry leading brands include:3216

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Market Leadership in Loss Prevention& Security SolutionsExternal LossesSafety & SecurityInternal Losses Collusion MerchandiseTheft Shop lifting Organized Crime (ORC) Vendor Fraud Refund Fraud Cash Theft Financial Fraud Intrusion Detection Life Safety Access ManagementHigh orsHigh icsHigh gh TheftSolutions33Emerging Store Performance SolutionsPortfolioCustomerIntelligence Store Traffic Counting Queue measurement/monitoring Pathway Monitoring SystemsItemIntelligenceEmployeeIntelligence Real-time Inventory visibility OOS reduction Replenishment Plan-o-gram Compliance Shrink Detection Access Control Video Surveillance Security Systems Asset TrackingVideoAnalyticsItemVisibility /RFIDTrafficMonitoring34 Transaction tracking Labor Productivity Labor Reduction Store Staffing sExecution3417

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010TRS 2009 Revenue MixFY09 TRS Revenue by ProductBA/FA10%FY09 TRS Revenue by RegionSensors &SourceTagging30%VideoSurveillance20%Service/S i /Maintenance & Other15%ROW25%EASSystems/InstallNorth America40%EMEA35%25%35Loss Prevention Markets Larger,Store Performance Markets Growing Faster2009 Market Size by Product/Service ( M)Total 2009 Market Size 7 billionProjected Growth rate (2009-14) 5-6%5% 2.7B3%4% 2B 1.6B7%30 % .8B40-50% 10% .6B 10% 1%EASVideo/AccessBurglar/Fire AlarmLoss Prevention SolutionsX% Projected CAGRFY09BusinessIntelligenceInventory VisibilityStore Performance SolutionsFY14X% Tyco ShareSource: 2010 VDC Study for EAS, TRS/ADT regional analysis for Video and Burglar Alarm, Gartner Group for Business Intelligence and IDTechExfor Inventory Visibility3618

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Market Trends and Customer Needs DivergingBetween Mature and Emerging MarketsChanges in Customer NeedsMarket Trends Uneven globaleconomic recoveryMatureMarketsEmergingMarkets Opportunity for newpsolutions;;operationalin inventory visibility &video analytics In-storeso epproductivityoducy ROI driven investment Slower retail growthpredicted Limited new storeopenings Operations in multiplegeographies andchannels Robust economicgrowth, especially inChina and India Increased need forcore loss preventionsolutions Retail infrastructurebuild out; significantnew store openings Need for service andsupport in newmarketsImplications to Tyco Expanded tag portfolio New tag recirculationbusiness models Growth opportunitiesfor core EAS business Build product andservice differentiationin high-priority markets Evolution of sales andservice models37Strong Retail Growth and Global Retailer Investment MakeChina, India and Brazil Attractive TRS Growth OpportunitiesProjected 2010-2015 Retail Growth RatesProjected 2010-2015 New Store OpeningsTopp 20 FastestGrowing rld Average 6.4%3.90%2.50%1863.90%2.70%USSpainGermanySOURCE: Planet RetailUnitedKingdonUnitedStatesBrazilIndiaChina, India andBrazilUSChina, India andBrazilChinaSOURCE: MVI Retail Insights* Wal-Mart is entering India in 2009, no future growth plans published, to date3819

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Driving 5 P’s of Growth in Asia Product - Launched EAS productit ttargetedt d att needsd off AsianA isuiteretailersEAS Essentials Product Portfolio Price - Established engineeringcenters in India and China.Expanding low cost manufacturingfootprint Place - Investment in rapid growthof sales channel Promotion - Market developmentand brand building initiativesTagsDetectionDeactivation People - Broad investment intraining and organizationaldevelopment39Reducing Operational Inefficiencies Is Potentially WorthMore Than Twice as Much to Retailers as Eliminating Shrink 35B 42B 160B 160B(1-3% of sales)( 5% of sales)OperationalInefficienciesresulting inout-of-stocksVALUERetail ortfolioCOMPLEXITY/INFO INTENSITYPOS AnalyticsVideo AnalyticsItem Level RFID4020

Tyco International SHOW FILE FINAL.pptSeptember 23, 2010Tyco Technologies Align with RetailerInvestment PrioritiesRIS Store Systems Study January 201041Building Store Performance Solutions Acq

Video image / clip capture Live video view 20 Z-Wave Home Control Wireless Camera Wave Automation Lamp ModulesDevices Thermostats Locks Other. Tyco_International_SHOW_FILE_FINAL.ppt September 23, 2010 11 ADT Pulse will Integrate With Numerous Devices ADT can inte