Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q1 2023 Earnings Presentation
24 slides from Vertiv's earnings presentation, Apr 26, 2023
Slide 1: First Quarter 2023 Results
First Quarter 2023 Results April 26, 2023 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to V
Slide 3: First quarter 2023 key messages
First quarter 2023 key messages Organic net sales up 35% (including +9% price realization) compared to last year’s first quarter with strong growth in Americas and EMEA. Book-to-bill ratio was ~1.0x. Orders down 23% compared to same quarter last year, consistent with expectations. Order patterns nor
Slide 4: Market Environment
Market Environment SEGMENT AMERICAS APAC EMEA Feb-23 Apr-23 Feb-23 Apr-23 Feb-23 Apr-23 CLOUD / HYPERSCALE COLOCATION ENTERPRISE / SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS COMMERCIAL & INDUSTRIAL Seeing initial signs of second half acceleration in market Confidential. Property of Vertiv.
Slide 5: Customer demand and supply chain update
Customer demand and supply chain update CUSTOMER DEMAND & PRICING UPDATE SUPPLY CHAIN & INFLATION UPDATE • Strong order intake drives book-to-bill ratio of ~1.0x in • Metals (Steel, Copper & Aluminum) commodities all the first quarter projecting lower levels than 2022 peak but are starting to trend
Slide 6: Lead times and order pattern normalizing
Lead times and order pattern normalizing LEAD TIME REDUCTION ENABLES ORDER NORMALIZATION • Although not yet where they need to be, lead times are improving, and customers are starting to return to historical order patterns • Thermal business shows similar but more ~40% extreme pattern due to supply
Slide 7: First quarter 2023 financial results
First quarter 2023 financial results $Millions; deltas to midpoint of guidance range Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Adj. Free Cash Flow Up ~32%% Up $163M Up 1,040 bps Up $0.32 Up $175M Organic up ~35% Up ~$50M vs. prior guidance Up 260 bps vs. prior guidance U
Slide 8: First quarter 2023 segment results
First quarter 2023 segment results $Millions Americas ➢ Organic growth driven by both volume (+48%) and strong year over year price increases (+13%). High growth Net sales across product portfolio with thermal particularly strong. Up 61% Down (6%) ➢ Operating margins significantly improved driven by
Slide 9: Second quarter 2023 financial guidance
Second quarter 2023 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Up ~14% Up ~$108M Up ~600 bps Up ~$0.18 Organic up ~15% ~1,600 ~190 ~$0.28 1,399 ~11.9% 82 5.9% $0.10 Q2 2022 Q2 2023 Q2 2022
Slide 10: Full year 2023 financial guidance
Full year 2023 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Adj. Free Cash Flow Up ~15% Up ~$360M Up ~460 bps Up ~$0.74 Up ~$610M Organic up ~15% Up $25M vs. prior guidance Up 30 bps vs. pri
Slide 11: Key takeaways
Key takeaways Exceeded guidance on all financial metrics in first quarter validating operational turnaround Generated $25M adj. free cash flow in first quarter and on track to deliver full year adj. free cash flow of $300M - $400M Order patterns normalizing but remain strong with book-bill ratio ~1.
Slide 12: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 13: Non-GAAP financial measures – first quarter results
Non-GAAP financial measures –first quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | 1stQUARTER) 1Q23 1Q22 D ($M | 1st Q
Slide 14: Non-GAAP financial measures – first quarter results (cont.)
Non-GAAP financial measures – first quarter results (cont.) Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M, except EPS | 1st QUARTER 2023) (loss) expense, net warrant liability e
Slide 15: Non-GAAP financial measures – second quarter 2023 guidance
Non-GAAP financial measures – second quarter 2023 guidance At midpoint of guidance range Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax Net income ($M, except EPS | 2nd QUARTER 2023(
Slide 16: Non-GAAP financial measures – FY 2023 guidance
Non-GAAP financial measures –FY 2023 guidance At midpoint of guidance range Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating Interest Change in Income tax Net income ($M, except EPS | FULL YEAR 2023(1)) profit (loss) expe
Slide 17: Non-GAAP financial measures: Q1 2022 – Q1 2023 results
Non-GAAP financial measures: Q1 2022 – Q1 2023 results Net Sales(1) ($M) 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 Americas $535.1 $647.2 $712.6 $833.7 $2,728.6 $862.3 APAC 332.8 407.2 436.1 425.2 1,601.3 313.0 EMEA 288.5 345.0 332.4 395.7 1,361.6 345.8 Total $1,156.4 $1,399.4 $1,481.1 $1,654.6 $5,691.5 $1,521.
Slide 18: Non-GAAP financial measures: Q1 2022 – Q1 2023 results
Non-GAAP financial measures: Q1 2022 – Q1 2023 results Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin ($M) 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 Net sales $1,156.4 $1,399.4 $1,481.1 $1,654.6 $5,691.5 $1,521.1 Operating profit (45.2) 26.2 80.0 162.4 223.4 130.3
Slide 19: Non-GAAP financial measures: Q1 2022 – Q1 2023 results
Non-GAAP financial measures: Q1 2022 – Q1 2023 results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted operating profit (loss) ($M) 1Q22 2Q22 3Q22 4Q22 FY22 1Q23 Americas $57.9 $82.5 $115.2 $170.5 $426.1 $190.6 Asia Pacific 41.5 68.5 83.3 81.1 274.4 39.1 Eur
Slide 20: Non-GAAP financial measures – organic growth reconciliation
Non-GAAP financial measures – organic growth reconciliation Reconciliation of change in net sales to organic change in net sales Organic (1) Organic growth percentage change is calculated as organic growth divided by net sales. Net Sales Δ FX Δ growth Organic Δ % (1) ($M | 1st QUARTER) Americas: $32
Slide 21: First quarter orders growth from prior year
First quarter orders growth from prior year $Millions unless otherwise specified First quarter orders growth Overall (26%) FX headwind (3%) Total excluding FX (23%) Pricing 7% Volume (30%) Total excluding FX (23%) Confidential. Property of Vertiv. 21
Slide 22: Full year 2023 projected adjusted operating profit vs. 2022
Full year 2023 projected adjusted operating profit vs. 2022 $Millions; FY 2023 at midpoint of guidance • Pricing assumes ~$225M carryover benefit and ~$75M of new pricing actions 175 (175) 800 • Volume benefit of ~$535M 100 higher sales (40) • Assumes material and freight inflation of ~$85M and labo
Slide 23: Key FX rates and other modeling assumptions
Key FX rates and other modeling assumptions $Millions unless otherwise specified 2Q – 4Q Sales FX Translation Exposure by Currency Assumption CNY 14% CNY / USD 6.87 EUR 14% USD / EUR $1.09 GBP 6% USD / GBP $1.24 INR 5% INR / USD 82.1 Other non-USD 13% Total non-USD 52% 1-mo SOFR + CRA 4.80% USD 48%
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