Worthington Enterprises, Inc. · NYSE:WOR
Worthington Enterprises — Worthington Industries — Baird's 2019 Global Industrial Conference
24 slides from Worthington Enterprises's conference presentation, Nov 6, 2019
Slide 1: 2019 Global Industrial Conference
4 WORTHINGTON INDUSTRIES S 2019 GLOBAL INDUSTRIAL bh” CONFERENCE 7 i JOE HAYEK - CFO 7 I 4 6, 2019
Slide 2: Vision
VISION TO BE THE TRANSFORMATIVE PARTNER FOR OUR CUSTOMERS, A POSITIVE FORCE IN OUR COMMUNITIES AND EARN EXCEPTIONAL RETURNS 2
Slide 3: Net Sales of $4.35 Billion
NET SALES OF $4.35 BILLION INCLUDING OUR SHARE OF UNCONSOLIDATED JVS 3
Slide 4: Broad Manufacturing Footprint
BROAD MANUFACTURING FOOTPRINT 7 0 O P E R A T I N G L O C A T I O N S , 9 J O I N T V E N T U R E S STEEL PROCESSING PRESSURE CYLINDERS OTHER JOINT VENTURES UPDATED NOVEMBER 2019 4
Slide 5: Largest Purchaser of Steel Behind Automakers
• • • • • • • • LARGEST PURCHASER OF STEEL BEHIND AUTOMAKERS 5
Slide 6: $4.35B Trailing 12 Month Net Sales
$4.35B TRAILING 12 MONTH NET SALES 08/31/19 TTM INCLUDING OUR SHARE OF UNCONSOLIDATED JVS NET SALES BY END-MARKETS* OPERATING/EQUITY INCOME BY SEGMENT TTM** 14% 11% 34% 18% 4% 4% 3% 27% 9% 39% 37% Automotive Construction Industrial Consumer Products Steel Cylinders WAVE / Other / JVs Agriculture Hea
Slide 7: Profile: Steel Processing
SALES BY END MARKET PROFILE AUTO F Y 1 9 Automotive 59% Other STEEL PROCESSING 13% AGRICULTURE Heavy Truck 7% Agriculture Construction 9% 12% SALES BY PRODUCT MIX F Y 1 9 CORE PRODUCTS CONSTRUCTION Cold Rolled Carbon flat rolled steel processing - Broad range of metal Strip products in sheet, coil a
Slide 8: Profile: Pressure Cylinders
SALES BY REPORTABLE SEGMENT PROFILE F Y 1 9 Industrial Products 52% PRESSURE CYLINDERS Oil & Gas Equipment 9% Consumer Products 39% SBU PRODUCT MIX F Y 1 9 CORE PRODUCTS Oil & Gas Water 9% 10% EU Low Industrial Products - Broad line of pressure cylinders Pressure and cryogenic vessels, tanks and tra
Slide 9: Profile: WAVE (50% JV)
PROFILE CONTRIBUTION TO WI EQUITY INCOME ($M) $82 $71 $54 $33 WAVE (50% JV) 2005 2010 2015 2019 CORE PRODUCTS 5 facilities in North America MARKETS Sustainable revenue and EBITDA OVER growth with creative fabricated Product Price architectural metal components, focusing on superior customer value, $
Slide 10: Growth Strategy
GROWTH STRATEGY Working together using technology, analytics and automation enables us to deliver… Successful innovation, transformation, and acquisitions that drive value for customers and earn exceptional returns for our shareholders. All with Our Philosophy at the center. 1 0
Slide 11: Value Drivers in Action: Transformation
VALUE DRIVERS IN ACTION: TRANSFORMATION Focused data driven LEAN events to improve our businesses Example of Transformation project at core steel facility What we did to drive improvements: Issue: Sales & operations planning receiving inaccurate messages resulting Analyzed historical forecasts and
Slide 12: Value Drivers in Action: Innovation
VALUE DRIVERS IN ACTION: INNOVATION Creating innovative solutions to meet the needs of customers and expand into new markets Cannabis Extraction Cylinders • Need for cleaner alternative to traditional steel 100# tank identified • Voice of customer work conducted to understand need and size opportuni
Slide 13: Value Drivers in Action: Acquisition
VALUE DRIVERS IN ACTION: ACQUISITION Focus on selective acquisitions to consolidate higher value add niches (strip , coated, pickling, blanking) Heidtman Steel Cleveland Acquisition • Acquired for $30 million in October 2019 • Consistent with strategy of consolidating higher value-added niches • Exp
Slide 14: Financial Goals
F IN A N CIA L G O A L S • GROW EBITDA & FREE CASH FLOW EVERY YEAR • 10%+ RETURN ON CAPITAL • RAISE MARGINS • REDUCE EARNINGS VOLATILITY • BALANCED CAPITAL ALLOCATION • MODEST LEVERAGE / AMPLE LIQUIDITY (INVESTMENT GRADE) • RIGOROUS CAPITAL DISCIPLINE 1 4
Slide 15: Balanced Capital Allocation Strategy
BALANCED CAPITAL ALLOCATION STRATEGY Strong cash flows and significant liquidity support balanced approach to capital allocation focused on growth and rewarding shareholders NEARLY $3 BILLION OF CAPITAL DEPLOYED OVER PAST 10 YEARS Reinvest in the business to create value and support CAPITAL growth
Slide 16: Consolidated Results
CONSOLIDATED RESULTS $ millions, except EPS FY2018 FY2019 3M FY2019 3M FY2020 Sales $3,582 $3,760 $988 $856 Adjusted EBITDA* $397 $330 $105 $78 % of sales 11.1% 8.8% 10.6% 9.1% Operating Income* $195 $142 $52 $26 % of sales 5.5% 3.8% 5.3% 3.1% EPS* $3.05 $2.60 $0.92 $0.62 Avg Invested Capital $1,696
Slide 17: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS • Growth strategy focused on value drivers & enablers to enhance margins • Solid free cash flow and ample liquidity to execute on strategy • Rigorous capital discipline focused on high cash flow investments • Balanced approach to capital allocation focused on investing for
Slide 18: Supplemental Data
4 WORTHINGTON INDUSTRIES SUPPLEMENTAL DATA
Slide 19: Supplemental Data: Adjusted EBITDA / Free Cash Flow
SUPPLEMENTAL DATA ADJUSTED EBITDA / FREE CASH FLOW FY18 FY19 FY19 FY20 $ millions Annual Annual QTD QTD Net Income $ 194.8 $ 153.5 $ 54.9 $ (4.8) Interest Expense 38.7 38.1 9.7 9.5 Taxes 8.2 43.2 14.5 (0.2) EBIT $ 241.7 $ 234.7 $ 79.2 $ 4.5 D&A 103.4 95.6 24.5 24.2 EBITDA $ 345.0 $ 330.3 $ 103.7 $ 2
Slide 20: Supplemental Data: Adjusted Operating Income / EPS
SUPPLEMENTAL DATA ADJUSTED OPERATING INCOME / EPS $ millions, except EPS FY2018 FY2019 3M FY2019 3M FY2020 Operating Income $142 $145 $51 ($19) Restructuring and non recurring* 54 (3) 1 45 Operating Income Adjusted $195 $142 $52 $26 EPS $3.09 $2.61 $0.91 ($0.09) Restructuring and non recurring* (0.0
Slide 21: Financials: Steel Processing
S T E E L P R O C E S S I N G FINANCIALS $ millions FY 2018 FY2019 3M FY2019 3M FY2020 Sales $2,253 $2,436 $660 $523 Adj. EBITDA* $177 $122 $48 $14 % of sales* 7.9% 5.0% 7.3% 2.6% Operating Income* $143 $93 $40 $6 excl. Restructuring % of sales 6.3% 3.8% 6.0% 1.2% Capital Expenditures $32 $39 $9 $8
Slide 22: Financials: Pressure Cylinders
P R E S S U R E C Y L I N D E R S FINANCIALS $ millions FY2018 FY2019 3M FY2019 3M FY2020 Sales $1,206 $1,208 $300 $304 Adj. EBITDA* $127 $105 $26 $41 % of sales* 10.6% 8.7% 8.7% 13.4% Operating Income* $80 $63 $16 $30 excl. Restructuring % of sales 6.6% 5.3% 5.4% 9.7% Capital Expenditures $33 $38 $
Slide 23: Meaningful JV Earnings
MEANINGFUL JV EARNINGS Unconsolidated JVs managed to produce regular cash dividends that closely approximate earnings $ MILLIONS $160 DIVIDEND to WII $140 (CASH FLOW) $120 $115 $110 $103 $101 EQUITY EARNINGS* $100 *Excludes $102 $101 Restructuring and $90 Impairment Charges $80 $87 $60 $40 $30 $29 $
Slide 24: Contact / Safe Harbor Statement
CONTACT SAFE HARBOR STATEMENT Worthington Industries wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995 (the “Act"). Statements by the Company which are not historical information constitute "forward looking statements" within the
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