Zurn Elkay Water Solutions Corporation · NYSE:ZWS
Zurn Elkay Water Solutions — Q3 2024 Earnings Presentation
13 slides from Zurn Elkay Water Solutions's earnings presentation, Oct 30, 2024
Slide 1: Third Quarter 2024 Financial Results
Third Quarter 2024 Financial Results October 30, 2024
Slide 2: Cautionary Statement Under The Private Securities Litigation Reform Act
Cautionary Statement Under The Private Securities Litigation Reform Act Forward-Looking Statements This presentation includes "forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties. Forward-looking statements include statements we make con
Slide 3: Performance Update
Performance Update Strategic 3Q Results Developments (1) (2) Share repurchases of $50M v Proforma Core sales' +4% YoY (1.6M shares) Y Adjusted EBITDA® margin of 25.6% ... up YTD share repurchases of $130M +150 bps YoY (4.2M shares) O) i Quarterly dividend increased 13% v FCF® of $87M in the quarter
Slide 4: Third Quarter Financial Results
$ in millions 3Q 2024 3Q 2023 Change Net Sales $410 $398 3% Growth from: Core (1) 3% Pro forma Core (2) 4% Adjusted EBITDA (1) $105 $96 9% % of Sales 25.6% 24.1% +150 bps 4
Slide 5: Net Debt Leverage and Free Cash Flow
2.2x $750 2.0x 1.7x $500 540 536 554 495 496 1.4x 1.2x 1.2x $250 1.1x 0.8x 0.7x $0 Dec-21 Dec-22 Dec-23 Sep-23 Sep-24 Dec-21 Dec-22 Dec-23 Sep-23 Sep-24 . 5
Slide 6: Q3 YTD Sustainability Impact
Q3 YTD Sustainability Impact SUSTAINABLE PRODUCTS % 86% revenue from products with sustainable attributes ENERGY & EMISSIONS. 1 e = million kWh of annual electricity savings from projects completed in 2024 SUSTAINABLE PRODUCTS 24 billion gallons of water saved from our products COMMUNITY 3,200 volun
Slide 7: Market Update
Market Update Dodge Momentum Index” Architecture Billing Index@ o @ @ Construction Backlog® 205 (2000=100, Seasonally Adjusted) 60 2 Commercial & Institutional - Months of Backlog 8s 10 200 50 8 v5 4s 6 40 150 35 4 125 30 2 25 100 PSFSSVSHFRRARSRRS SE © 19 20 a 2 B 24 BSRESSRER ESSERE ERE PRPSRSFTIS
Slide 8: Dodge Starts by Institutional and Commercial Building Type
Religious Bldg Dodge Starts Dormitory mmm Institutional Starts YoY Growth % Transportation Institutional 100 10% Bldg 2024 Dodge Sq Ft Starts 5 300 8% by Building Type® 2 200 o Recreation 3 4% Bldg Education -40% of total Dodge 2 100 2% institutional starts (Sq FD) ° = = — — 0% 2021 2022 2023 2024E
Slide 9: Dodge Starts Square Footage and Growth
Dodge Starts YoY Growth % 230 12% Millions of squre feet 10% 220 8% 210 6% 4% 200 2% 0% 190 -2% 180 -4% 2021 2022 2023 2024E 2025E Dodge Starts YoY Growth % 300 25% Millions of Squre Feet 250 20% 200 15% 10% 150 5% 100 0% 50 -5% 0 -10% 2021 2022 2023 2024E 2025E 9
Slide 10: Participation Across the Build Cycle
Participation Across the Build Cycle Dodge Starts Impact on Zurn Elkay New Construction Sales Job Start Flow Systems (-20% sales) Water Safety & Control (-30% sales) H* sales based on current Hygienic & Environmental year Dodge Starts = ih CEOS cI) % sales based on prior year(s) Dodge Starts
Slide 11: Poised for Sustained Long-Term Growth
Poised for Sustained Long-Term Growth 55% new construction / 45% retrofit 98% North America sales High institutional exposure (-50%) Hyper local / hyper regional Interest rate cuts Core +LSD Growth Back to Growth +MSD Growth . + * Highly variable cost model Profitability 25% Adjusted 30% to 35% * De
Slide 12: Zurn Elkay Outlook
Zurn Elkay Outlook December Quarter 2024 Full Year Outlook 4Q Outlook Core sales growth® up +LSD Below the line assumptions: Interest expense of -$8 million v Increasing Adjusted EBITDA” margin expectation v Full Year Adjusted EBITDA™ of $387 to Stock compensation expense of ~$9 million $389 million
Slide 13: Thank You
Thank You
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