Worthington Enterprises, Inc. · NYSE:WOR
Worthington Enterprises — Baird's 2023 Global Industrial Conference
31 slides from Worthington Enterprises's conference presentation, Nov 8, 2023
Slide 1: 2023 Global Industrial Conference
ibdroot\projects\IBD-NY\trillium2020\664375_1\16. Investor Day Presentations\03. WOR Enterprises\2023.09.29 - Investor Day - WOR Enterprises Shell_v78.pptx 2023 GLOBAL INDUSTRIAL CONFERENCE NOVEMBER 8, 2023 Andy Rose – President & CEO Joe Hayek - CFO
Slide 2: Notes to Investors
Notes to Investors FORWARD LOOKING STATEMENTS. Worthington Industries, Inc. (the “Company” or “Worthington”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements by the Company relating to the intended separat
Slide 3: Notes to Investors
Notes to Investors PRO FORMA FINANCIAL INFORMATION. Unless otherwise specified, all financial data and operating metrics included in these materials are presented on a pro forma basis giving effect to the reorganization and the planned separation of the Steel Processing business, as described in the
Slide 4: The Planned Separation Will Create Two Market-Leading, Independent Public Companies
The Planned Separation Will Create Two Market-Leading, Independent Public Companies WORTHINGTON ENTERPRISES WORTHINGTON STEEL Andy Rose Joseph Hayek Geoff Gilmore Tim Adams Chief Executive Officer Chief Financial Officer Chief Executive Officer Chief Financial Officer ✓✓ A market-leader with premier
Slide 5: Worthington Enterprises is a Compelling Standalone Investment Story
Worthington Enterprises is a Compelling Standalone …and Now is the Investment Story…. Right Time to Separate Strategic Focus Enhanced focus on strategic priorities We have now achieved the scale, financial strength and capabilities to operate on a Timing standalone basis Differentiation Compelling a
Slide 6: Worthington Enterprises Key Investment Highlights
Worthington Enterprises FOUNDED IN KEY INVESTMENT HIGHLIGHTS 1955 • Established Portfolio of Market-Leading Brands with High Barriers to Entry NET SALES OF • Strong Underlying Secular Trends Enabling Steady $1.4 BILLION1 Long-Term Growth • Business Model Drives High Free Cash Flow and Returns • Wort
Slide 7: Established Portfolio of Market-Leading Brands
Established Portfolio of Market-Leading Brands… 80%+ of Adjusted EBITDA comes from brands and products with leading market positions Ceiling Metal Hand Torch Camping Portable Vertical Well Water Suspension Framing And Fuels Fuel Helium Tanks Residential Tanks Systems Heating Tanks Note: FY2023 perio
Slide 8: With High Barriers-to-Entry
High Margin, Asset-Light Business Model, Generating Strong Cash Flow …With High Barriers-to-Entry and Returns Highly Engineered Solutions – Meeting Rigorous Specifications in Highly Regulated Markets Reliability, Speed & Product Quality – Exceptional Quality, Service, and Supply Chain Solutions Robu
Slide 9: Our Products Serve Markets Well Positioned to Capitalize on Strong Secular Trends
Our Products Serve Markets that are Well Positioned to Capitalize on Strong Secular Trends GOVERNMENT STIMULUS ENVIRONMENTAL RE-SHORING AND AND SUPPORT POPULATION SHIFT INVESTMENT NEAR SHORING Ceiling Metal HVAC H2 & CNG Propane Refillable Lawn & BBQ / Foam & Industrial Metal HVAC Tools Systems Solu
Slide 10: Business Model Drives Strong Returns
Business Model Drives Strong Returns Net Sales ($M) Adjusted EBITDA1 ($M) 16% 20% CAGR CAGR $1,418 $1,361 $1,311 $319 $297 $285 $1,061 $205 FY2021 FY2022 FY2023 TTM FY2021 FY2022 FY2023 TTM Note: TTM figures as of Q1 FY24. 1 Refer to appendix for reconciliation of Adjusted EBITDA to the comparable G
Slide 11: High Free Cash Flow Generation
High Free Cash Flow Generation Accelerating Growth Today Long-Term Targets High Margin and Asset-Light Business Model $1.4B 6-8% Net Sales Net Sales CAGR ~21% Powered by the Worthington Business System 24% Adj. EBITDA Margin1 Adj. EBITDA Margin1 ~85% Driven by Strong Underlying Secular Trends 85-90%
Slide 12: Worthington Business System Accelerates Our Growth and Profitability
Worthington Business System Accelerates Our Growth and Profitability Our deeply-held Philosophy is rooted in the Golden Rule – we treat our customers, employees, investors, and suppliers as we would like to be treated • Through continuous transformation we drive higher margins within Manufacturing,
Slide 13: Innovation for Highly Engineered Products Drives Incremental Sales and Margin
Innovation for Highly Engineered Products Drives Incremental Sales and Margin 01 02 03 BUILDING EXPANDING DISRUPTING THE CORE THE CORE THE CORE Improving existing Transformational Strength in channel products with a innovations driving management to drive leading brand sustainable value margin expan
Slide 14: Guided by Our Philosophy
Guided by Our Philosophy A People-First, Performance-Based Culture Culture of Health & Positive Diversity & Profit-Sharing Engagement Safety Impact Inclusion Incentives Strong sense of Putting our people Partnering with Valuing diversity of Committed to best- belonging and first and ensuring the org
Slide 15: Low Leverage and Ample Liquidity Provides Financial Flexibility
Low Leverage and Ample Liquidity Provides Financial Flexibility Strong Expected Leverage at Close1: 1.0x Balance Sheet Total Debt / TTM Adj. EBITDA Commitment to Maintaining Financial Investment Flexibility Grade Rating Disciplined Expected Liquidity at Close2: Capital $701M Allocation Note: TTM fig
Slide 16: Building Products at a Glance
Building Products at a Glance Brands Key Figures Financial Metrics (TTM as of Q1 FY24) ($ Millions) Net Sales Industry Leader With Innovation and Product Specification Driving High Barriers to Entry in Attractive End-Markets $570M Net Sales $402 $542 $586 $570 38% FY21 FY22 FY23 TTM Specialized Prod
Slide 17: Consumer Products at a Glance
Consumer Products at a Glance SEGMENT OVERVIEW KEY FIGURES FINANCIAL METRICS (TTM as of Q1 FY24) ($ Millions) Value-added partner to customers, featuring a Net Sales wide variety of highly engineered products across $686 $647 $647M $636 Tools, Outdoor Living, and Celebrations $524 TOOLS OUTDOOR LIVI
Slide 18: Sustainable Energy Solutions At a Glance
Sustainable Energy Solutions At a Glance Supporting the growing hydrogen ecosystem and adjacent sustainable energies with products including: Slupsk, Poland • On-board fueling systems and services T3 Onboard fueling • Gas containment solutions and services for the Burscheid, systems and storage, tra
Slide 19: Our Strategic Enablers
Our Strategic Enablers Worthington’s Performance-Based Culture Enables Continued Transformation, Innovation, and Appetite for Strategic Acquisitions LONG-TERM TARGETS TRANSFORMATION 6-8% 24% 85-90% MERGERS & Net Sales Adj. EBITDA Free Cash Flow ACQUISITIONS CAGR Margin1 Conversion2 Make the Business
Slide 20: A Compelling Financial Profile
A Compelling Financial Profile Adj. EBITDA Net Sales Adj. EBITDA1 Margin $1,361M $285M 21% Net Working Fixed Assets3 FCF Conversion4 Capital2 $295M $260M 85% Note: TTM figures as of Q1 FY2024. 1 Refer to appendix for reconciliation of Adjusted EBITDA to the comparable GAAP measure. 2 Net Working Cap
Slide 21: Best-in-Class Financial Profile with Attractive Upside
Best-in-Class Financial Profile with Attractive Upside High Margin, High Cash Flow, Asset Light, and Low Leverage Adj. EBITDA Margin % (FY2023) FCF Conversion (FY2023)1 40 % 100 % 86 % Peer Average: 80 % 30 % 80 % 21 % Peer Average: 19 % 60 % 20 % 40 % 10 % 20 % 0% 0% AWI WE AAON AOS GTLS FBIN LECO
Slide 22: Long-Term Capital Allocation Priorities
Long-Term Capital Allocation Priorities • Brand, Innovation, and Channel investments ORGANIC GROWTH • Investments in automation and R&D initiatives • High-returning Capex investments • Build out core businesses and selectively grow into new markets TARGETED M&A • Create value via channel and supply
Slide 23: Worthington Enterprises Key Investment Highlights
Worthington Enterprises FOUNDED IN KEY INVESTMENT HIGHLIGHTS 1955 • Established Portfolio of Market-Leading Brands with High Barriers to Entry NET SALES OF • Strong Underlying Secular Trends Enabling Steady $1.4 BILLION1 Long-Term Growth • Business Model Drives High Free Cash Flow and Returns • Wort
Slide 24: Appendix
ibdroot\projects\IBD-NY\trillium2020\664375_1\16. Investor Day Presentations\03. WOR Enterprises\2023.09.29 - Investor Day - WOR Enterprises Shell_v78.pptx Appendix
Slide 25: Update on Separation Into Two World-Class Companies
Update on Separation Into Two World-Class Companies Key Events Expected Timing Public Announcement of Separation September 29, 2022 Amended Worthington Enterprises September 27, 2023 Revolver Credit Facility Effectiveness Public Form 10 Filing October 4, 2023 Investor Day Presentation October 11, 20
Slide 26: Our Philosophy
OUR PHILOSOPHY adopted in 1961, is the foundation of our culture EARNINGS SUPPLIERS ▪ The first corporate goal for Worthington Industries is to earn money for its ▪ We cannot operate profitably without those who supply the quality materials shareholders and increase the value of their investment. we
Slide 27: Worthington Enterprises Reconciliation of Non-GAAP Measures
Worthington Enterprises Reconciliation of Non-GAAP Measures (in thousands) 27
Slide 28: Worthington Enterprises Reconciliation of Non-GAAP Measures
Worthington Enterprises Reconciliation of Non-GAAP Measures (in thousands) Twelve Months Ended May 31, 2023 Worthington Sustainable Enterprises Consumer Building Energy Corporate & Consolidated Products Products Solutions Other Net Sales $ 1,418,496 $ 686,319 $ 586,059 $ 146,118 n/a Operating income
Slide 29: Worthington Enterprises Reconciliation of Non-GAAP Measures
Worthington Enterprises Reconciliation of Non-GAAP Measures (in thousands) Twelve Months Ended May 31, 2022 Worthington Sustainable Enterprises Consumer Building Energy Corporate & Consolidated Products Products Solutions Other Net Sales $ 1,309,198 $ 636,478 $ 541,757 $ 130,954 $ 9 Operating income
Slide 30: Worthington Enterprises Reconciliation of Non-GAAP Measures
Worthington Enterprises Reconciliation of Non-GAAP Measures (in thousands) Twelve Months Ended May 31, 2021 Worthington Sustainable Enterprises Consumer Building Energy Corporate & Consolidated Products Products Solutions Other Net Sales $ 1,112,032 $ 523,697 402,038 134,890 51,407 Operating income
Slide 31: Worthington Industries Reconciliation of Non-GAAP Measures
Worthington Industries Reconciliation of Non-GAAP Measures (in thousands) Below provides a reconciliation of trailing twelve months adjusted EBITDA as of August 31, 2023 and 2022 for Worthington Industries, Inc. along with the calculation of net debt to adjusted EBITDA for the same periods. The calc
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