EnerSys · NYSE:ENS

EnerSys — Q1 2023 Earnings Presentation

30 slides from EnerSys's earnings presentation, Aug 10, 2022

  1. Slide 1: Q1’23 Financial Results

    Q1’23 Financial Results AUGUST 10, 2022 August 2022 © 2022 EnerSys. All Rights Reserved. 1

  2. Slide 2: Forward Looking Statements

    Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements on this call that are based on Management’s current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual re

  3. Slide 3: Business Update

    Business Update D AV I D S H A F F E R , C H I E F E X E C U T I V E O F F I C E R August 2022 © 2022 EnerSys. All Rights Reserved. 3

  4. Slide 4: Q1’23 Results

    Q1’23 Results ($ millions, except EPS) Q1’23 Key Takeaways Revenue $899 • $899M record quarterly net sales +10.3% y/y, second highest quarterly (Y / Y Growth) 10.3% revenue and volume • Would have been ~$40m higher without FX impact /MO temporary shutdowns Adj. Operating Earnings & $65 • TPPL revenu

  5. Slide 5: Record Backlog Drives Long-Term Growth

    Record Backlog Drives Long-Term Growth ORDER GROWTH & MACRO CONDITIONS DRIVING RECORD BACKLOG ($ millions) 1600 ~$1,450 1200 ~$850 800 ~$550 400 0 Q1'21 Ending Q1'22 Ending Program Wins Organic Volume Price Advance Ordering Supply Chain Q1'23 Ending Delays • Continued backlog growth driven by strong

  6. Slide 6: Q1’23 Business Segment Performance

    Q1’23 Business Segment Performance Net Sales Adj. Op Segment Overview ($ million) Margin • $850M record backlog; revenue/earnings tailwind when supply chain constraints subside Energy Systems $409 3.3% • 5G, CPUC, discrete projects, & customer wins driving growth +10.1% y/y -20 bps y/y • Pricing act

  7. Slide 7: Technology Advancements

    Technology Advancements POWERING THE FUTURE, EVERYWHERE FOR EVERYONE Specialty Batteries Battery Energy Storage Systems (BESS) Making history Defining the future August 2022 © 2022 EnerSys. All Rights Reserved. 7

  8. Slide 8: Environmental, Social & Governance Update

    Environmental, Social & Governance Update • New director Rudy • New Carbon Neutrality • Participating in CDP Wynter, President of Goals: Scope 1 by 2040 process; submitted first National Grid, New York and Scope 2 by 2050 response to CDP • Brings breadth and depth • Identified initial CapEx question

  9. Slide 9: Focusing on What We Can Control

    Focusing on What We Can Control 1 Pricing – continue to execute pricing increases commensurate with cost increases 2 Redesign – redesign products for component supply constraints (e.g., chips) 3 Operating Efficiencies – reduce costs through EOS Profitable Growth – retain leading market position & gr

  10. Slide 10: Finance Update

    Finance Update ANDI FUNK, CHIEF FINANCIAL OFFICER August 2022 © 2022 EnerSys. All Rights Reserved. 10

  11. Slide 11: Q1’23 Results

    Q1’23 Results Net Sales Adj Operating Income & Margin Y/Y Change $907 $899 +8% price/mix +7% volume (5%) FX, ~($30m) $75 $67 $ millions $ millions $65 $815 9.2% 7.4% 7.2% Q1'22 Q4'22 Q1'23 Q1'22 Q4'22 Q1'23 Adj EBITDA & Margin Adj Diluted EPS $1.25 $1.20 $94 $88 $1.15 $86 $ millions $ millions 11.5%

  12. Slide 12: Q1’23 Segment Financial Highlights

    Q1’23 Segment Financial Highlights Sales Segment Adj. Segment Overview ($ millions; % y/y Growth) Operating Margin Volume +7% • Record backlog +113% y/y, +226% vs FY’21 Price/Mix +8% Energy Systems $409 FX (4%) 3.3% • Price/mix beginning to improve ---------------------------- -20 bps y/y • Price an

  13. Slide 13: Price Recapture Gaining Traction

    Price Recapture Gaining Traction Price Recapture (q/q, $ millions) Price Recapture (y/y, $ millions) 90 Ongoing price $160 Further price recapture recapture initiatives anticipated in FY’23 45 anticipated to push $80 recapture higher 0 $- -45 ($80) -90 ($160) Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'2

  14. Slide 14: Adj EPS Bridge

    Adj EPS Bridge Q1’23 SEQUENTIAL AND YEAR-OVER YEAR Note: See appendix for non-GAAP reconciliation. $M USD AA August 2022 © 2022 EnerSys. All Rights Reserved. 14

  15. Slide 15: Disciplined & Balanced Capital Allocation

    Disciplined & Balanced Capital Allocation Capital Allocation FY’18 – FY’22 Q1’23 Healthy Balance Sheet (cumulative) Priorities $ millions $ millions • 2 – 3x target leverage Invest in Organic • ~$380M cash and cash equivalents 1 Growth (CapEx) ~$390 ~$23 • Strong cash generation outpaced by strategi

  16. Slide 16: Recession Playbook

    Recession Playbook I M PA C T & A C T I O N S T O M I T I G AT E S L O W D O W N Key Takeaways: LoB Resilience 1. Slowdown not evident yet, but being vigilant All • Extensive backlog & pent-up demand buffers impact • Supply chain normalizing provides mix benefit 2. Company has deep history of discip

  17. Slide 17: Looking Ahead

    Looking Ahead Guidance Assumptions • Seasonally slower quarter EPS • ($0.08) per share from FX adj. diluted $1.05 to $1.15 • Euro remains at Q1’23 levels • No FX OIE gain (Q2’23) • ($0.04) per share from Q1’23 temporary Missouri shutdowns CapEx • Continued capacity investments $100m (FY’23) • Includ

  18. Slide 18: Appendix

    Appendix August 2022 © 2022 EnerSys. All Rights Reserved. 18

  19. Slide 19: Motive Power

    Motive Power R E V E N U E H I S T O R I C A L LY T R E N D S W I T H G D P Americas MP Net Sales vs US GDP % Motive Power Strengths $140,000 vs Prior Cycles: 6% $120,000 • Bolstered by movements from increased 4% automation & electrification of ICE forklifts $100,000 2% • Higher margin NexSys® main

  20. Slide 20: Q1’23 Results

    Q1’23 Results ($ millions) Q1 F'22 Q4 F'22 Q1 F'23 NET SALES $814.9 $907.0 $898.9 GROSS PROFIT 193.2 (24%) $196.2 (22%) $185.5 (21%) Adj. OP EARNINGS $ $75.1 $66.8 $64.9 Adj. OP EARNINGS 9.2% 7.4% 7.2% % Adj. EPS $1.25 $1.20 $1.15 Note: See appendix for non-GAAP reconciliation. August 2022 © 2022 En

  21. Slide 21: Q1’23 Net Sales by Segment & Region, Q/Q

    Q1’23 Net Sales by Segment & Region, Q/Q ($ millions, Except per Share Amounts) ( $ Millions, Except Per Share Amounts ) Fav/(Unfav) Q4'22 Q1'23 $ % Energy Systems $410 $409 ($2) 0% Motive Power $365 $368 $3 1% Specialty $132 $123 ($9) -7% Total Net Sales $907 $899 ($8) -1% 6% Organic, 2% Price, 0%

  22. Slide 22: Q1’23 Net Sales by Segment & Region, Y/Y

    Q1’23 Net Sales by Segment & Region, Y/Y ($ millions) Fav/(Unfav) Q1'22 Q1,23 $ % Volume Price M&A Fx Energy Systems $371 $409 $37 10% 7% 8% - -4% Motive Power $336 $368 $32 9% 7% 8% - -6% Specialty $108 $123 $15 14% 11% 6% - -2% Total Net Sales $815 $899 $84 10% 7% 8% - -5% Fav/(Unfav) Q1'22 Q1,23

  23. Slide 23: Q1’23 Adj Operating Earnings by Segment

    Q1’23 Adj Operating Earnings by Segment ($ millions) Fav/(Unfav) Year Over Year Q1'22 Q1'23 $ % Operating Earnings Energy Systems $13.1 $13.6 $0.5 4% 3.5% 3.3% Motive Power 50.6 42.3 ($8.3) -16% 15.6% 11.5% Specialty 11.4 8.9 ($2.5) -22% 10.6% 7.3% Total Operating Earnings $75.1 $64.9 ($10.2) -14% A

  24. Slide 24: Q1’23 Adj Net Earnings & EPS

    Q1’23 Adj Net Earnings & EPS ($ millions, except per share amounts) Fav/(Unfav) Q1'22 Q1'23 $ % Operating Earnings $75.1 $64.9 ($10.2) -14% As % Net Sales 9.2% 7.2% (2.0)Pts. Book Tax Rate 18% 16% Net Earnings $54.4 $47.4 ($7.0) -13% As % Net Sales 6.7% 5.3% (1.4)Pts. EPS diluted $1.25 $1.15 ($0.10)

  25. Slide 25: Balance Sheet & Other Highlights

    Balance Sheet & Other Highlights ($ millions) Q1'22 Q1'23 Cash & Cash Equivalents $406.2 $383.2 Net Debt (Gross Debt − Investments) $776.4 $1,018.1 Net Cash from Operations ($48.1) ($71.9) Capital Expenditures ($16.4) ($23.0) Leverage Ratio (per US Credit Agreement) 1.95X 3.0X Primary Working Capita

  26. Slide 26: Non-GAAP Reconciliations

    Non-GAAP Reconciliations August 2022 © 2022 EnerSys. All Rights Reserved. 26

  27. Slide 27: Non-GAAP Reconciliation

    Non-GAAP Reconciliation August 2022 © 2022 EnerSys. All Rights Reserved. 27

  28. Slide 28: Non-GAAP Reconciliation

    Non-GAAP Reconciliation August 2022 © 2022 EnerSys. All Rights Reserved. 28

  29. Slide 29: Non-GAAP Reconciliation

    Non-GAAP Reconciliation August 2022 © 2022 EnerSys. All Rights Reserved. 29

  30. Slide 30: Thank you.

    Thank you. For more information visit us at www.enersys.com World Headquarters EnerSys EMEA EnerSys Asia 2366 Bernville Road EH Europe GmbH 152 Beach Road Reading, PA 19605 USA Baarerstrasse 18 Gateway East Building #11- 08 +1 610-208-1991 / +1 800-538-3627 6300 Zug Switzerland Singapore 189721 / +6

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