Kennametal Inc. · NYSE:KMT
Kennametal — Q3 2025 Earnings Presentation
31 slides from Kennametal's earnings presentation, May 7, 2025
Slide 1: FY25 Third Quarter Earnings Call Presentation
FY25 Third Quarter Earnings Call Presentation May 7, 2025
Slide 2: Safe Harbor Statement
Q 3 F Y 2 5 E AR N I N G S Safe Harbor Statement Certain statements in this release may be forward-looking in nature, or “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are
Slide 3: Continued progress on growth and cost initiatives despite weak markets
Q 3 F Y 2 5 E AR N I N G S Continued progress on growth and cost initiatives despite weak markets Earnings per Diluted Share (EPS): Reported $0.41; Adjusted $0.47 (vs. $0.24 reported and $0.30 adjusted in prior year) Sales of $486M, (3)% organic decline year-over-year Sales Growth • Metal Cutting (4
Slide 4: Mixed markets continue; effect of tariffs on market conditions uncertain
E N D M AR K E T O U T L O O K Mixed markets continue; effect of tariffs on market conditions uncertain FY25 Sales Assumptions at Outlook Midpoint General Engineering Transportation Energy Earthworks Aerospace & Defense Prior Current Prior Current Prior Current Prior Current Prior Current Down Down
Slide 5: Actions underway to mitigate ~$80M tariff cost exposure
TAR I F F P O L I C Y I M PAC T Actions underway to mitigate ~$80M tariff cost exposure1 Actions Underway • Utilizing global footprint to optimize product flow • Re-routing internal supply chain flows • Re-balancing production capacity • Implementing tariff surcharges • Leveraging US footprint to ca
Slide 6: Investments in commercial excellence driving share gains
RECENT CUSTOMER WINS Investments in commercial excellence driving share gains Metal Cutting Infrastructure Photo credit GE Additive Photo credit GE Additive Aero and Defense General Engineering Transportation Energy Earthworks • Secured initial order to • Secured order to provide • Won order displac
Slide 7: IRA credits and restructuring actions offset soft markets
C O N S O L I D AT E D Q 3 F I N AN C I AL O V E R V I E W IRA credits and restructuring actions offset soft markets Adjusted Reported Quarter Ended ($ in millions) Change from PY March 31, 2025 March 31, 2024 March 31, 2025 March 31, 2024 Mm Sales (6)% $486 $516 $486 $516 Organic (3)% (2)% (3)% (2)
Slide 8: Advanced manufacturing credit & operations drive higher adjusted EPS
Q 3 F Y 2 5 AD J U S T E D E P S B R I D G E Advanced manufacturing credit & operations drive higher adjusted EPS $0.02 $0.47 $0.10 $0.02 $0.06 ($0.02) ($0.01) $0.30 • Lower share count • Lower interest • Includes $0.03 benefit from IRA Credit • Lower raw material costs • Pricing • Restructuring sav
Slide 9: Continued market weakness partially offset by growth initiatives
M E TAL C U T T I N G B U S I N E S S S E G M E N T Q 3 F Y 2 5 S U M M ARY Continued market weakness partially offset by growth initiatives ▪ EMEA drives decline Sales Growth Sales Growth by Region Adjusted • Americas - General Engineering weakness partially offset by (in constant currency) Operati
Slide 10: Strategic initiatives drive aerospace and defense growth
I N F R AS T R U C T U R E B U S I N E S S S E G M E N T Q 3 F Y 2 5 S U M M ARY Strategic initiatives drive aerospace and defense growth ▪ Regional Sales Sales Growth by Region Adjusted Organic sales • EMEA – Growth in Aerospace & Defense and Earthworks partially offset by Operating Sales Growth (i
Slide 11: Strong cash flow from operations continues
B AL AN C E S H E E T AN D C AS H F L O W S TAT E M E N T H I G H L I G H T S Strong cash flow from operations continues Total Debt Net Debt $800 Share Repurchases & Debt Profile $659 $622 $608 $609 ▪ $200M 3-year share repurchase program $566 $ Millions $600 $522 $516 $512 • Q3: $25M purchased; 1.1
Slide 12: FY25 Outlook
F U L L Y E AR O U T L O O K FY25 Outlook OUTLOOK CONSIDERS THE FY25 TOTAL YEAR OUTLOOK FOLLOWING ASSUMPTIONS Sales Inflationary environment continues to moderate • Estimated effect of Tariff cost and mitigation actions included $1.970- $1.990B ~(5)% – (4)% ~2% ~(1)% Revenue Assumptions Year over Ye
Slide 13: Staying the course despite turbulent macro conditions
S U M M ARY Staying the course despite turbulent macro conditions Three Value Creation Pillars DELIVERING CONTINUOUS PORTFOLIO GROWTH IMPROVEMENT OPTIMIZATION Growing Above Market Doing Things Better Right Products, Right Places • Innovative solutions • Operational Excellence • Optimize product & bu
Slide 14: Appendix
Appendix EK xennametat
Slide 15: Sales decline due to weak market conditions
Q 3 F Y 2 5 S E G M E N T R E S U LT S Sales decline due to weak market conditions Metal Cutting Infrastructure Americas 45% Energy 7% Americas 57% Gen Eng 33% AsiaPac 18% AsiaPac 22% Energy 24% Aero & Def 13% Gen Eng 53% Aero & Def 10% EMEA 37% EMEA 21% Transp 27% Earthworks 33% Quarter Ending Marc
Slide 16: Strong balance sheet
B AL AN C E S H E E T Strong balance sheet ASSETS ($ in millions) March 31, 2025 June 30, 2024 Cash and cash equivalents $97 $128 Accounts receivable, net 291 303 Inventories 556 515 Other current assets 69 57 Total current assets 1,013 1,003 Property, plant and equipment, net 912 938 Goodwill and o
Slide 17: Non-GAAP Reconciliations
N O N - G AAP R E C O N C I L I AT I O N S Non-GAAP Reconciliations The information presented by the Company contains certain non-GAAP financial measures. Kennametal management believes that presentation of these non-GAAP financial measures provides useful information about the results of operations
Slide 18: Non-GAAP Reconciliations (cont'd)
N O N - G AAP R E C O N C I L I AT I O N S Non-GAAP Reconciliations (cont’d) Constant Currency End Market Sales Growth (Decline) Constant currency end market sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) by end m
Slide 19: Adjusted Results – Q3
N O N - G AAP R E C O N C I L I AT I O N S Adjusted Results – Q3 Operating Operating Effective Tax ($ in millions, except percents and per share data) Sales Gross Profit Expense Income Net Income(5) Diluted EPS Rate Q3 FY25 Reported Results $ 486.4 $ 156.4 $ 104.0 $ 44.1 $ 31.5 $ 0.41 23.6 % Reporte
Slide 20: Adjusted EBITDA and EBITDA Margin – Q3
N O N - G AAP R E C O N C I L I AT I O N S Adjusted EBITDA and EBITDA Margin – Q3 Three Months Ended March 31, ($ in millions, except percents) 2025 2024 Net income attributable to Kennametal, reported $ 31.5 $ 19.0 Add back: Interest expense 6.2 6.8 Interest income (0.7) (0.4) Provision for income
Slide 21: Adjusted Segment Operating Income and Margins – Q3
N O N - G AAP R E C O N C I L I AT I O N S Adjusted Segment Operating Income and Margins – Q3 Metal Cutting Metal Cutting Infrastructure Infrastructure ($ in millions, except percents) Sales Operating Income Sales Operating Income Q3 FY25 Reported Results $ 304.3 $ 24.9 $ 182.1 $ 19.4 Reported Opera
Slide 22: Organic Sales Growth (Decline) – Q3
N O N - G AAP R E C O N C I L I AT I O N S Organic Sales Growth (Decline) – Q3 Three Months Ended March 31, 2025 Metal Cutting Infrastructure Kennametal Organic sales decline (4)% (2)% (3)% Foreign currency exchange effect (3) (2) (3) Business days effect — — — Sales decline (7) % (4) % (6) % Three
Slide 23: Constant Currency Regional Sales Growth (Decline) – Q3 FY25
N O N - G AAP R E C O N C I L I AT I O N S Constant Currency Regional Sales Growth (Decline) – Q3 FY25 Metal Cutting Three Months Ended March 31, 2025 Americas EMEA Asia Pacific Constant currency regional sales decline (1) % (6) % (1) % Foreign currency exchange effect (3) (5) (3) Regional sales dec
Slide 24: Constant Currency Regional Sales Growth (Decline) – Q3 FY24
N O N - G AAP R E C O N C I L I AT I O N S Constant Currency Regional Sales Growth (Decline) – Q3 FY24 Metal Cutting Three Months Ended March 31, 2024 Americas EMEA Asia Pacific Constant currency regional sales decline (1) % — % (1) % Foreign currency exchange effect (2) — (2) Regional sales decline
Slide 25: Constant Currency End Market Sales Growth (Decline) – Q3 FY25
N O N - G AAP R E C O N C I L I AT I O N S Constant Currency End Market Sales Growth (Decline) – Q3 FY25 Metal Cutting General Aerospace & Three Months Ended March 31, 2025 Engineering Transportation Defense Energy Constant currency end market sales (decline) growth (5) % (2) % — % 2 % Foreign curre
Slide 26: Constant Currency End Market Sales Growth (Decline) – Q3 FY24
N O N - G AAP R E C O N C I L I AT I O N S Constant Currency End Market Sales Growth (Decline) – Q3 FY24 Metal Cutting General Aerospace & Three Months Ended March 31, 2024 Engineering Transportation Defense Energy Constant currency end market sales (decline) growth (2) % — % 9 % (8) % Foreign curre
Slide 27: Net Debt and Free Operating Cash Flow
N O N - G AAP R E C O N C I L I AT I O N S Net Debt and Free Operating Cash Flow Net Debt Three Months Ended (in millions) 3/31/2025 3/31/2024 3/31/2023 3/31/2022 Total debt (gross) $ 609.1 $ 608.1 $ 659.0 $ 621.9 Less: cash and cash equivalents 97.5 92.1 93.5 100.0 Net debt $ 511.7 $ 516.0 $ 565.5
Slide 28: Primary Working Capital – Q3 FY25
N O N - G AAP R E C O N C I L I AT I O N S Primary Working Capital – Q3 FY25 (in thousands, except percents) 3/31/2025 12/31/2024 9/30/2024 6/30/2024 3/31/2024 Average Current assets $ 1,013,360 $ 968,774 $ 1,003,869 $ 1,002,592 $ 999,937 Current liabilities 415,626 382,228 398,386 415,961 413,245 W
Slide 29: Primary Working Capital – Q3 FY24
N O N - G AAP R E C O N C I L I AT I O N S Primary Working Capital – Q3 FY24 (in thousands, except percents) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Average Current assets $ 999,937 $ 1,009,820 $ 1,010,555 $ 1,026,789 $ 1,079,035 Current liabilities 413,245 414,108 419,846 433,975 488,729
Slide 30: Primary Working Capital – Q3 FY23
N O N - G AAP R E C O N C I L I AT I O N S Primary Working Capital – Q3 FY23 (in thousands, except percents) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Average Current assets $ 1,079,035 $ 1,048,303 $ 1,011,486 $ 1,024,708 $ 1,043,241 Current liabilities 488,729 494,334 497,488 485,610 460,3
Slide 31: Primary Working Capital – Q3 FY22
N O N - G AAP R E C O N C I L I AT I O N S Primary Working Capital – Q3 FY22 (in thousands, except percents) 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Average Current assets $ 1,043,241 $ 984,210 $ 966,948 $ 1,004,807 $ 966,916 Current liabilities 460,365 410,983 389,223 437,394 425,553 Wor