Ul Solutions Inc. · NYSE:ULS
Ul Solutions — Q3 2024 Earnings Presentation
20 slides from Ul Solutions's earnings presentation, Nov 5, 2024
Slide 1: Earnings Presentation Q3 2024
UL SOLUTIONS INC. Earnings Presentation Q3 2024 November 5, 2024 © 2024 UL LLC. All Rights Reserved.
Slide 2: Forward looking statements
Forward looking statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, about UL Solutions' (the "Company") financial results and estimates and business prospects that involve substantial risks and unc
Slide 3: Q3 2024 Highlights
Q3 2024 Highlights Extending the momentum from the first half of 2024: • 8.1% Revenue growth, 9.3% Organic1 • 6.1% Adjusted Net Income2 increase • Adjusted EBITDA2 up 12.3% • Generated Free Cash Flow2 of $282M for the last twelve months ended September 30, 2024 1 Refer to Organic definition in the A
Slide 4: Q3 2024 Revenue +9.3% organic
Q3 2024 Revenue +9.3% organic1 $ in millions $27 $2 $739 $731 ($2) ($6) $34 $676 Q3 2023 Industrial Consumer S&A Q3 2024 FX1 Acquisition/ Q3 2024 Organic 1 Organic 1 Organic 1 Organic 1 Divestiture1 1 Refer to Organic, FX and Acquisition / Divestiture definitions in Appendix. 4
Slide 5: Q3 Adjusted EBITDA performance
Q3 Adjusted EBITDA1 performance +12.3% $ in millions % Adjusted EBITDA Margin1 $63 $183 $— $— $183 $163 ($43) 24.1%1 25.0%1 Q3 2023 Organic 2 Organic 2 Q3 2024 FX 2 Acquisition/ Q3 2024 Revenue Expenses Organic 2 Divestiture 2 1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. Refer
Slide 6: Q3 Adjusted Net Income performance +6.1%
Q3 Adjusted Net Income1 performance +6.1% $ in millions % Adjusted Net Income Margin1 $63 $98 $104 ($48) ($7) ($2) 14.5%1 14.2%1 Q3 2023 Organic 3 Organic 3 Interest Other2 Q3 2024 Revenue Expenses 1 Adjusted Net Income and Adjusted Net Income margin are non-GAAP financial measures. Refer to the App
Slide 7: Industrial
Industrial $ in millions Q3 2024 results Industrial revenue • 9.3% Revenue Growth (+11.7% Organic2) +9.3% $317 – Strength in demand for electrical products & $290 components, renewable energy and component certification testing – Increased lab capacity – Growth in ongoing certification service reven
Slide 8: North America Advanced Battery Lab opening in Michigan draws customers, media, officials
North America Advanced Battery Lab opening in Michigan draws customers, media, officials • August opening showcased cutting-edge EV/industrial battery-testing capabilities near world's premier auto innovation hub • 90,000-square-foot facility augments existing testing network in Northbrook, IL; Frem
Slide 9: Consumer
Consumer $ in millions Q3 2024 results Consumer revenue • 8.8% Revenue Growth (+9.2% Organic2) +8.8% $321 – Strength in Non-certification Testing and Other $295 Services in retail and consumer technology and growth in Certification Testing in consumer technology and HVAC Q3 2023 Q3 2024 • Adjusted E
Slide 10: Software and Advisory
Software and Advisory $ in millions Q3 2024 results Software & Advisory revenue • 2.2% Revenue Growth (+2.2% Organic2) +2.2% $93 – Strength in Software more than offset a moderate $91 decline in Advisory • Adjusted EBITDA1 decreased $2M; Adjusted Q3 2023 Q3 2024 EBITDA margin1 decreased 260 bps – In
Slide 11: LTM Cash Flow
LTM Cash Flow LTM Cash Flow Operating Cash Flow % in millions Capital Expenditures Free Cash Flow1 • Generated Free Cash Flow1 of $282M for $520 the last twelve months ended September $421 30, 2024, an increase of $63M (+28.8%) vs the last twelve months ended September 30, 2023 $282 • YTD Free Cash
Slide 12: Full-year 2024 outlook
• Increasing to mid-to-high single digit constant currency, organic1 revenue growth • Q4 constant currency, organic1 revenue growth expected to be in the mid-to-high single digit range Full-year • Reiterating full-year Adjusted EBITDA margin2 improvement 2024 outlook • Capital expenditures expected
Slide 13: Appendix
Appendix 13
Slide 14: Components of revenue change
Components of revenue change Three Months Ended September 30, 2024 Acquisition / (in millions) Organic1 Divestiture2 FX3 Total Organic % Change Total % Change Revenue change Industrial $ 34 $ (6) $ (1) $ 27 11.7 % 9.3 % Consumer 27 — (1) 26 9.2 % 8.8 % Software and Advisory 2 — — 2 2.2 % 2.2 % Total
Slide 15: Components of revenue change
Components of revenue change Nine Months Ended September 30, 2024 Acquisition / (in millions) Organic1 Divestiture2 FX3 Total Organic % Change Total % Change Revenue change Industrial $ 95 $ (12) $ (9) $ 74 11.2 % 8.7 % Consumer 62 (1) (11) 50 7.1 % 5.7 % Software and Advisory 11 2 — 13 4.2 % 4.9 %
Slide 16: Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measure)1 2 Three Months Ended Nine Months Ended September 30, September 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Net income $ 94 $ 57 $ 260 $ 214 Depreciation and amortization expense 43 37 125 111 Interest expense 14 7 42 2
Slide 17: Adjusted EBITDA and margin by segment
Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measure)1 2 by segment Three Months Ended Nine Months Ended September 30, September 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Industrial Segment operating income $ 90 $ 87 $ 250 $ 242 Depreciation and amortization expense 12 9
Slide 18: Adjusted Net Income and Adjusted Net Income margin
Adjusted Net Income and Adjusted Net Income margin (non-GAAP measure)1 2 Three Months Ended Nine Months Ended September 30, September 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Net income $ 94 $ 57 $ 260 $ 214 Other expense (income), net — 7 (18) (8) Stock-based compensation 10 —
Slide 19: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share (non-GAAP measure)1 Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Diluted earnings per share2 $ 0.44 $ 0.27 $ 1.22 $ 1.01 Other expense (income), net — 0.03 (0.09) (0.04) Stock-based compensation 0.05 — 0.08 — Goodwill impair
Slide 20: Free Cash Flow (non-GAAP measure)
Free Cash Flow (non-GAAP measure)1 Nine Months Ended LTM2 September 30, September 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Net cash provided by operating activities $ 394 $ 341 $ 520 $ 421 Capital expenditures (179) (156) (238) (202) Free Cash Flow1 $ 215 $ 185 $ 282 $ 219 Reve