Westinghouse Air Brake Technologies Corporation · NYSE:WAB
Westinghouse Air Brake Technologies — Q4 2024 Earnings Presentation
36 slides from Westinghouse Air Brake Technologies's earnings presentation, Feb 12, 2025
Slide 1: Wabtec Financial Results & Company Highlights
Wabtec Financial Results & Company Highlights FOURTH QUARTER 2024 1
Slide 2: Forward Looking Statements & Non-GAAP Financial Information
Forward Looking Statements & Non-GAAP Financial Information This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigati
Slide 3: Today's Participants
Today’s Participants RAFAEL JOHN KYRA SANTANA OLIN YATES President & Executive Vice President & Vice President, Chief Executive Officer Chief Financial Officer Investor Relations 3
Slide 4: Wabtec Highlights
Wabtec Highlights ▪ Robust Financial Performance in 2024 ▪ Another Strong Year in 2025 Expected ▪ Long-Term Guidance Updated 4
Slide 5: 4Q 2024 Overview
4Q 2024 Overview Q4 sales growth up moderately behind rebalance of Sales $2.58B Up 2.3% YOY Freight segment production. Full year up 7.3% Operating Margin 12.9% 16.9% Strong gross margin expansion offset by higher SG&A as a percent of revenue GAAP Adjusted Earnings Per Share $1.23 $1.68 GAAP EPS up
Slide 6: 2025 Market Expectations
2025 Market NORTH AMERICAN FREIGHT CARLOADS NORTH AMERICAN AVERAGE ACTIVE LOCOMOTIVES Expectations 2.5% 2.3% 2.1% 1.8% FAVORABLE / UNFAVORABLE FREIGHT NA Carloads + Active Locomotive Fleet 1Q24 2Q24 3Q24 4Q24 4Q21 4Q22 4Q23 4Q24 International Freight Source: Association of American Railroads Source:
Slide 7: Executing On Our Value Creation Framework
Executing On Our Value Creation Framework VA L U E C R E AT I O N FRAMEWORK RECENT WINS ▪ $1+ Billion in new locomotive and mods orders Accelerate innovation of scalable technologies ▪ North American mods orders: Grow and refresh expansive global - $165 million order with Ferromex installed base - $
Slide 8: Resilient Portfolio Through The Cycle
Resilient Portfolio Through The Cycle ROBUST BACKLOG DEMONSTRATED EXECUTION STRONG CASH GENERATION & RECURRING REVENUE OPERATING MARGIN CASH FROM OPERATIONS 18.9% $1.8B $7.5B $7.7B 15.5% 15.1%15.9% 16.2% 17.0% $6.3B $6.8B 13.1% $5.5B 11.2% 12.1% $1.2B 9.9% $1.1B $1.0B $0.8B 117% 102% 89% Cash 93% Co
Slide 9: 4Q 2024 Financial Summary
4Q 2024 Financial Summary SALES OP INCOME / OP MARGIN EARNINGS PER SHARE $1.68 $2.53B $2.58B $431M $438M $1.54 +9.1% 17.0% 16.9% YOY $334M $1.20 $1.23 $308M 12.9% +2.5% 12.2% YOY 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 GAAP GAAP ADJ(1) ADJ(1) GAAP GAAP ADJ(1) ADJ(1) 2.3% INCREASE (2.9% INC
Slide 10: 4Q 2024 Sales
4Q 2024 Sales ($ in millions) PRODUCT LINE 4Q24 YOY 4Q KEY DRIVERS Services $806 (15.9)% SERVICES Lower modernization deliveries and overhauls as expected Equipment $499 41.8% EQUIPMENT Components $282 4.8% Increased sales from higher locomotive deliveries Digital Intelligence $207 (1.4)% COMPONENTS
Slide 11: 4Q 2024 Consolidated Gross Profit
4Q 2024 Consolidated Gross Profit 4Q KEY DRIVERS ($ in millions) GAAP Adjusted VOLUME 2023 GROSS PROFIT $764 $777 Higher Transit segment sales % Gross Profit Margin 30.3% 30.8% MIX/PRICING Favorable mix of products within groups and modest contract Volume ↑ ↑ escalation, partially offset by unfavora
Slide 12: 4Q 2024 Consolidated Operating Income
4Q 2024 Consolidated Operating Income ($ in millions) GAAP Adjusted 2023 OP INCOME $308 $431 % Operating Margin 12.2% 17.0% Gross Profit 33 38 SG&A (37) (41) Engineering 10 10 Amortization 20 - 2024 OP INCOME $334 $438 % Operating Margin 12.9% 16.9% Note: Adjusted numbers represent non-GAAP financia
Slide 13: 4Q 2024 Freight Segment Performance
4Q 2024 Freight Segment Performance SALES OP INCOME / OP MARGIN 12-MONTH BACKLOG $1.79B $1.79B(2) $5.42B $5.58B $345M $348M 19.3% 19.4% $273M $245M 15.2% 13.6% 2023 2024 2023 2024 2023 2024 2023 2024 GAAP GAAP ADJ(1) ADJ(1) 0.3% INCREASE 2.9% INCREASE YOY (1.1% INCREASE EX-CURRENCY) (5.4% Excluding
Slide 14: 4Q 2024 Transit Segment Performance
4Q 2024 Transit Segment Performance SALES OP INCOME / OP MARGIN 12-MONTH BACKLOG $130M $789M(1) $737M 16.4% $2.04B $2.10B $110M $103M 14.9% $87M 13.0% 11.9% 2023 2024 2023 2024 2023 2024 2023 2024 GAAP GAAP ADJ(1) ADJ(1) 7.1% INCREASE 3.3% INCREASE YOY (7.5% INCREASE EX-CURRENCY) (5.6% Excluding Cur
Slide 15: Resilient Business Allows For Execution On Financial Priorities
Resilient Business Allows For Execution On Financial Priorities FOCUSED ON CASH CONVERSION (1 ) CASH FROM OPS DISCIPLINED CAPITAL ALLOCATION Strong balance sheet and financial (3) $1.83B (4) position … liquidity of $2.21B (1) 117% Cash Conv Debt leverage ratio of 1.5x (2) 2024 $1,834M $1,097M Share
Slide 16: Integration 2.0 & Portfolio Optimization Update
Integration 2.0 & Portfolio Optimization Update INTEGRATION 2.0 UPDATE PORTFOLIO OPTIMIZATION UPDATE RUN-RATE SAVINGS(2) $97M $75-$90M BY 2025 ✓ Pruned ~$110M of low margin, non-strategic revenue Realized $87M ✓ 58% of total reduction from Freight Unrealized ✓ 42% of total reduction from Transit $22
Slide 17: 2024 Overview
2024 Overview Increased sales were driven by growth in the Freight & Sales $10.39B Up 7.3% YOY Transit Segments Operating Margin 15.5% 18.9% Operating margin benefited from sales growth and improved gross margin GAAP Adjusted GAAP EPS up 33.3% YoY …Adjusted EPS up 27.7% Earnings Per Share $6.04 $7.5
Slide 18: 2025 Outlook and Guidance
2025 Outlook O U T L O O K I N L I N E W I T H L O N G -T E R M and Guidance GROWTH FRAMEWORK EQUIPMENT Higher NA and international locomotive deliveries COMPONENTS (2) Stable demand for industrial components, partially offset by lower North American railcar 2025 GUIDANCE build REVENUES SERVICES Gro
Slide 19: Long-Term Guidance Update
Long-Term Guidance Update 19
Slide 20: Long-Term Guidance
Long-Term Guidance VA LU E C R E AT I O N F R A M E WO R K BASE YEAR 2024 5-YEAR OUTLOOK (1) 1 Accelerate innovation of scalable technologies Build high-margin, innovative and scalable products to increase customer productivity, automation, utilization, and $10.4B Mid Single Digit capacity REVENUE O
Slide 21: Future Revenue Growth & Margin Expansion
Future Revenue Growth & Margin Expansion ANNUAL REVENUE GROWTH ADJUSTED MARGIN IMPROVEMENT E X P E CTAT I O N S 2 0 2 5 – 2 0 2 9 : E X P E CTAT I O N S 2 0 2 5 – 2 0 2 9 : MID-SINGLE DIGITS 350+ BPS ACCELERATED GROWTH Technology-driven growth CAPITAL & TECHNOLOGY Pricing for value INVESTMENT Portfo
Slide 22: Introducing Integration 3.0 & 2025 Portfolio Optimization
Introducing Integration 3.0 & 2025 Portfolio Optimization INTEGRATION 3.0 PORTFOLIO OPTIMIZATION (2025 – 2027) (2025) C O N S O L I DAT E F O OT P R I N T / REDUCE COMPLEXITY WABTEC PL ANS TO EXIT VARIOUS Value chain improvement LOW MARGIN PRODUCT LINES $125-155M Office/facility rationalization Stre
Slide 23: Key Takeaways
Key Takeaways (1) 5-YEAR OUTLOOK 1 Strong revenue growth, margin expansion, increased Mid Single earnings and improved cash flow Digit ORGANIC SALES CAGR 2 350+ bps Positive productivity driven by continuous cost improvement combined with realization of Integration 2.0 & 3.0 savings ADJUSTED OPERATI
Slide 24: Income Statement
Income WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION Appendix A (1 of 2) Statement CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended Twelve Months Ended December 31
Slide 25: Income Statement (cont.)
Appendix A (2 of 2) Income Statement (cont.) WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended Twelve Months Ended Dec
Slide 26: Balance Sheet
Appendix B Balance Sheet WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, 2024 December 31, 2023 In millions Cash, cash equivalents and restricted cash $ 715 $ 620 Receivables, net 1,702 1,684 Inventories, net 2,314 2,284 Other current as
Slide 27: Cash Flow
Appendix C Cash Flow WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Twelve Months Ended December 31, 2024 2023 In millions Operating activities Net income $ 1,067 $ 825 Non-cash expense 580 473 Receivables (34) (195) Inventories (117) (58)
Slide 28: EPS and Non-GAAP Reconciliation
Appendix D (1 of 2) EPS and Non-GAAP Reconciliation Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period- to-period com
Slide 29: EPS and Non-GAAP Reconciliation
Appendix D (2 of 2) EPS and Non-GAAP Reconciliation Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period- to-period com
Slide 30: EBITDA Reconciliation
Appendix E EBITDA Reconciliation Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP f
Slide 31: Sales by Product Line
Appendix F Sales by Product Line WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION SALES BY PRODUCT LINE (UNAUDITED) Three Months Ended December 31, In millions 2024 2023 Freight Segment Equipment $ 499 $ 352 Components 282 269 Digital Intelligence 207 210 Services 806 958 Total Freight Segment $ 1,79
Slide 32: Segment Gross Margin & Operating Margin Reconciliation
Segment Gross Margin & Appendix G Operating Margin Reconciliation WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF REPORTED RESULTS TO ADJUSTED RESULTS - BY SEGMENT (UNAUDITED) Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Income from Income fr
Slide 33: Segment Sales Reconciliation
Appendix H Segment Sales Reconciliation WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF CHANGES IN NET SALES - BY SEGMENT (UNAUDITED) Three Months Ended December 31, In millions Freight Transit Consolidated 2023 Net Sales $ 1,789 $ 737 $ 2,526 Acquisitions 6 3 9 Foreign Exchange (1
Slide 34: Cash Conversion Reconciliation
Appendix I (1 of 2) Cash Conversion Reconciliation Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period compa
Slide 35: Cash Conversion Reconciliation (cont.)
Appendix I (2 of 2) Cash Conversion Reconciliation (cont.) Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-peri
Slide 36: Operating Margin Reconciliation
Appendix J Operating Margin Reconciliation WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF REPORTED RESULTS TO ADJUSTED RESULTS (UNAUDITED) Twelve Months Ended December 31, In millions 2020 2021 2022 2023 2024 Reported Income from Operations $ 745 $ 876 $ 1,011 $ 1,266 $ 1,609 Repo
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