Generac Holdings Inc. · NYSE:GNRC
Generac — Generac Holdlings — Q2 2024 Earnings Presentation
32 slides from Generac's earnings presentation, Jul 31, 2024
Slide 1: Investor Presentation
GENERAC INVESTOR PRESENTATION August 2024 OUR PURPOSE: Lead the evolution to more resilient, efficient, and sustainable energy solutions.
Slide 2: Investor Relations
GENERAC 2 INVESTOR RELATIONS Aaron Jagdfeld PRESIDENT & CEO York Ragen CHIEF FINANCIAL OFFICER Kris Rosemann SENIOR MANAGER – CORPORATE DEVELOPMENT & INVESTOR RELATIONS (262) 506-6064 InvestorRelations@generac.com
Slide 3: Forward Looking Statements
GENERAC 3 Forward Looking Statements Certain statements contained in this presentation, as well as • our ability to protect our intellectual property rights or • compliance with environmental, health and safety laws and other information provided from time to time by Generac successfully defend agai
Slide 4: Generac Overview
GENERAC 4 Generac Overview GENERAC EEE
Slide 5: Generac Overview
Founded in LTM Net Sales: 8,600 1959 $4.0 Billion Employees Worldwide LTM ADJ Omni-Channel ®& EBITDA: Distribution $693 Million Thousands of Dealers, 1,000+ Wholesalers, Engineers Retailers, and Worldwide E-Commerce Partners © LTM Region LTM Product Net Sales Mix: Net Sales Mix: 53% Residential 83%
Slide 6: Product Overview
GENERAC 6 Product Overview Residential – $2.1B Net Sales* C&I – $1.4B Net Sales* Other – $0.5B Net Sales* Grid Services Mobile Generator Home Standby Generator Residential Energy Stationary Generator Telecom Generator Storage Residential & C&I Connectivity Residential Load Manager Generator Controls
Slide 7: Generac Global Footprint
GENERAC 7 Generac Global Footprint
Slide 8: Track Record of Growth
GENERAC 8 $6,000 Track Record 15% REVENUE CAGR 2010 IPO Through 2024F of Growth $5,000 $4,000 Each growth cycle creates new & higher baseline $3,000 $2,000 $1,000 $- '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24F Note: $ amounts in millions. Represents net sales. Figures include results from a
Slide 9: Mega-Trends Review
GENERAC 9 Mega-Trends Review "Grid 2.0” - Evolution of the traditional electrical Emergence of cleaner alternative fuels utility model • Natural gas and other alternative fuels are • Increasing intermittent generation sources and vital to the energy transition electrification of everything • Cleaner
Slide 10: Powering a Smarter World
GENERAC 10 Powering a Smarter World Improve energy Increase power reliability through onsite generation and storage solutions that resilience and provide resiliency for homes, businesses independence. and communities. Optimize energy Enable sustainable and more efficient Powering a efficiency and co
Slide 11: Residential Solutions
GENERAC 11 Residential Solutions
Slide 12: Building the Home Energy Ecosystem of the Future
GENERAC 12 Building the Home Energy Ecosystem of the Future Multiple hardware devices connected to a single interface to optimize home energy generation & consumption. Prioritize energy resilience & 1 independence Deliver savings by optimizing 2 for energy efficiency Balance comfort and 3 conservati
Slide 13: Mega-Trends Support Parallel Growth Markets
GENERAC 13 Mega-Trends Support Parallel Growth Markets Whole Home • Increasing severe & volatile weather Whole Home • Rising power prices Resiliency • Grid supply/demand imbalances Energy Management • Environmental consciousness • Home as a sanctuary & aging in place • Policy tailwinds • Indefinite
Slide 14: Massive HSB Penetration Opportunity
GENERAC 14 Massive HSB Penetration Opportunity Widespread growth potential: • Total US penetration rate ~6.25% as of 2023 • Highest penetrated markets are 15-20%+ and growing Mega-trends and competitive advantages expected to drive robust growth: • Targeted Marketing drives growing demand for long d
Slide 15: Generac's Right To Win
GENERAC 15 Generac’s Right To Win HSB competitive advantages How we will compete in Energy Technology ✓ Global sourcing & logistics ✓ Leverage global supply chains ✓ Unmatched solution breadth ✓ Solutions to address a range of energy challenges ✓ Brand ✓ Trustworthy brand for homeowners & installers
Slide 16: Roadmap to Energy Technology Success
GENERAC 16 2026 → Drive scale & market share gains Roadmap to → Breakeven EBITDA on path to company-average Adj EBITDA margins Energy Technology → Ongoing innovation & expansion of the ecosystem – 2026 and beyond Success 2025 → Inverter product launch → Expand channels, leverage brand & lead generat
Slide 17: Commercial & Industrial Solutions
GENERAC 17 Commercial & Industrial Solutions
Slide 18: Building Multi-Asset C&I Microgrids
GENERAC 18 Building Multi-Asset C&I Microgrids Microgrid Controller Power Generation & Storage Energy Management Devices Monitoring & Controls Grid Services Turnkey solutions managed through a single interface integrating multiple assets to optimize power generation and consumption.
Slide 19: Developing Optimized Solutions for C&I Energy Evolution
GENERAC 19 Developing Optimized Solutions for C&I Energy Evolution Low High Complexity of Solution Advanced Basic Backup Power Plus Energy Services Energy Services Optimized Power Power + Service Power (Simple) (Complex) Solutions Customer Maturity • Simple demand response programs • Advanced monito
Slide 20: Financial Summary
GENERAC 20 Financial Summary
Slide 21: Financial Summary
GENERAC 21 Financial Summary Total Net Sales Gross Margin % Adjusted EBITDA Adjusted EBITDA Margin % $1,000 35.0% $5,000 55.0% $4,000 50.0% $800 30.0% $3,000 45.0% $600 25.0% $2,000 40.0% $400 20.0% $1,000 35.0% $200 15.0% $0 30.0% $0 10.0% 2019 2020 2021 2022 2023 2024F* 2019 2020 2021 2022 2023 20
Slide 22: Business Outlook
GENERAC 22 Business Outlook 2024F Guidance As Reported On July 31, 2024** Consolidated net sales • Consolidated revenue: increase between 4% to 8% • Residential products: increase at a mid-teens rate • C&I products: decrease at a mid-to-high single-digit rate Adjusted EBITDA margins • Between 17.0%
Slide 23: Disciplined & Balanced Capital Allocation
GENERAC 23 Disciplined & Balanced Capital Allocation 1. Organic CapEx CapEx as % of Net Sales 2. Strategic M&A $150 10.0% Growth $129 $128 Accelerating “Powering A Smarter World” Strategy $120 $110 8.0% Investment in technology, $86 $90 6.0% Demonstrated ability to in Millions innovation, R&D capabi
Slide 24: Appendix
GENERAC Appendix GENERAC EEE
Slide 25: Increasingly Imbalanced Electrical Grid
GENERAC 25 Increasingly Imbalanced Electrical Grid • SUPPLY RELIABILITY • DEMAND GROWTH DETERIORATING ACCELERATING • Climate change & severe weather • Electrification of everything • One-way system prone to outage • Transportation, HVAC, appliances • Infrastructure underinvestment • Data centers & a
Slide 26: HSB: A Penetration Story
GENERAC 26 HSB: A Penetration Story North American Penetration Opportunity(1) 90% 88.3% 80% Aging Population Fits Demographic 70% • ~75% of buyers age 50 and older % of US Addressable Market 60% • ~$500k median home value • ~80-85% retro-fit application 50% 40% • ~$135K median household income 30% 2
Slide 27: HSBs are the Solution for Extended Power Outages
GENERAC 27 HSBs are the Solution for Extended Power Outages The only worry-free, Outage Backup (Hrs) whole-home solution Standalone 18kWh Storage* for long outages Solar + 18kWhStorage* Ford F150 Lightning Lariat** Home Standby 24kw 0 20 40 60 80 100 120 The most cost- Installed Cost effective solut
Slide 28: Expanding Power Outage Severity
GENERAC 28 Expanding Power Outage Severity1 Total Outage Hours (Severity) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (1) Represents power outage hours for mainland U.S. only
Slide 29: Q2 2024 & LTM Financial Overview
GENERAC 29 Q2 2024 & LTM Financial Overview Actual Y/Y % Actual Y/Y % Q2 2024 Change LTM Change (unaudited) (unaudited) Residential $ 538.4 8.0% 2,112.8 (2.0%) Commercial & Industrial 344.2 (10.5%) 1,445.6 1.8% Other 115.6 (1.6%) 463.4 3.1% Net Sales $ 998.2 (0.2%) $ 4,021.8 (0.1%) Gross Profit $ 37
Slide 30: Adjusted EBITDA Reconciliation
GENERAC 30 Adjusted EBITDA Reconciliation 2020 2021 2022 2023 LTM Net income $ 347.2 $ 556.6 $ 408.9 $ 217.1 $ 243.0 Interest expense 33.0 33.0 54.8 97.6 96.4 Depreciation and amortization 68.8 92.0 156.1 166.6 170.2 Income taxes provision 99.0 135.0 99.6 73.2 81.1 Non-cash write-down and other char
Slide 31: Adjusted EBITDA Reconciliation
GENERAC 31 Adjusted EBITDA Reconciliation Three months ended Net Income to Adjusted EBITDA Reconciliation June 30, LTM Ended June 30, 2024 2023 2024 2023 (unaudited) (unaudited) Net income attributable to Generac Holdings. Inc. $ 59,115 $ 45,198 $ 242,325 $ 186,913 Net income (loss) attributable to
Slide 32: Adjusted Net Income Reconciliation
GENERAC 32 Adjusted Net Income Reconciliation Three months ended June 30, LTM Ended June 30, Net Income to Adjusted Net Income Reconciliation 2024 2023 2024 2023 (unaudited) (unaudited) Net income attributable to Generac Holdings. Inc. $ 59,115 $ 45,198 $ 242,325 $ 186,913 Net income attributable to