EnerSys · NYSE:ENS
EnerSys — Investor Presentation (February 2023)
39 slides from EnerSys's investor presentation, February 2023
Slide 1: Investor Presentation February 2023
Investor Presentation FEBRUARY 2023 February 2023 © 2023 EnerSys. All Rights Reserved.
Slide 2: Forward Looking Statements
Forward Looking Statements As a reminder, we will be presenting certain forward-looking statements on this call that are based on Management’s current expectations and views regarding future events and operating performance and are subject to uncertainties and changes in circumstances. Our actual re
Slide 3: Key Takeaways
Key Takeaways We are a global Industrial Technology company delivering ✓ highly differentiated Energy Solutions to Diverse End Markets Our Proprietary Technologies and Services play a critical role ✓ in the energy transition fueled by Megatrends Our Resilient Business Model positions us well to Capt
Slide 4: EnerSys at a Glance
EnerSys at a Glance (NYSE: ENS) L EAD IN G PR O VID ER O F D IF F ER EN T IAT ED EN ER G Y SO L U T IONS $3.4bn2 7.9%2 $4.472 ~11.4k2 10k+2 22%2 Sales Adj. Op. Earnings1 Margin Adj. Diluted EPS1 Total Employees Customers Market Share3 FY’22 SALES BY GEOGRAPHY GLOBAL FACILITY BASE4 Asia 7% EMEA 24% A
Slide 5: Technology Driven Portfolio Transformation
Technology Driven Portfolio Transformation 2010 2022 ▪ Traditional lead acid ▪ Integrated technology Growth Opportunities battery company solutions across energy ▪ Expand capacity for storage, power & premium products electronics, and software ▪ Grow Motive Power ▪ Narrow set of end markets & servic
Slide 6: Leveraging Our Platforms Across All Segments
Leveraging Our Platforms Across All Segments 3 Core Technology Platforms 3 Business Segments 8 End Markets Telecom Networks Energy Systems Broadband Cable Power Industrial Power and Utilities Electronics Energy Renewable Energy Storage Motive Power Premium (Flooded, TPPL, Data Centers Lithium-ion) E
Slide 7: Technology to Meet Customer Needs
Technology to Meet Customer Needs Lithium-ion • Edge computing, efficient data collection to the cloud • Maintenance-free, longer cycle life, fastest charge rate • Asset management software Software • Innovative safety technology • App support to manage health of assets • Ideal for use cases requiri
Slide 8: Technology Advancements
Technology Advancements POWERING THE FUTURE, EVERYWHERE FOR EVERYONE CPUC Network Powering Program Specialty Batteries Wireless Chargers ARTEMIS I Advancing both TPPL and Lithium modules Making history with specialty solutions Fast Charge & Storage TouchSafe Upgraded on-site demo installed Strategic
Slide 9: EnerSys Lines of Business
EnerSys Lines of Business A GLOBAL LEADER IN STORED ENERGY Energy Systems Motive Power Specialty $1.5B FY’22 Revenue $1.4B FY’22 Revenue $0.5B FY’22 Revenue Energy Systems focuses on the Motive Power batteries are Specialty segment provides energy telecommunication and broadband, utilized in electri
Slide 10: Our Sustainability Journey
Our Sustainability Journey July 2021 December April 2022 2H 2020 Launched 2021 Published 2025 Established full-time inaugural Published inaugural GRI and December 2022 Target date for 2021 Sustainability Team; joined diversity supplemental SASB-aligned Published first 2H 2023 diversity and employer
Slide 11: Our Sustainability Strategy
Our Sustainability Strategy $ 4 M A N N U A L C A P I TA L A L L O C AT I O N O V E R T H E N E X T 5 Y E A R S Our Progress to Date Future Aspirations 1 ■ Detailed tracking of key environmental metrics including Scope 1 & 2; Scope 3 emission ■ Targeting 25% reduction in energy intensity by 2030 (vs
Slide 12: Financial Update
Financial Update February 2023 © 2023 EnerSys. All Rights Reserved. 12
Slide 13: Q3'23 Results
Q3’23 Results ($ millions, except EPS) Q3’23 Key Takeaways • Record quarter net sales Net Sales $920 • +13% y/y at Constant Currency1 “CC” (Y / Y Growth) 9.0% • ~($35M) y/y FX pressure • $1.3B backlog, +11% y/y, robust demand and order trends across all segments Adj. Operating Earnings1 & $84.9 9.2%
Slide 14: Healthy Backlog Drives Long-Term Growth
Healthy Backlog Drives Long-Term Growth ORDER GROWTH & MACRO CONDITIONS DRIVING STRONG BACKLOG • Energy Systems: shipments from longer-term programs & seasonality slightly reducing Q3’23 backlog; backlog coverage >2x historic levels w/January book to bill >1.0 • Motive Power: continued strong order
Slide 15: Price/Mix - Cost Recapture Gaining Traction
Price/Mix - Cost Recapture Gaining Traction Price/Mix – Cost Recapture (q/q, $ millions) Price/Mix – Cost Recapture (y/y, $ millions) 90 Ongoing price $160 Further price/mix recapture initiatives recapture anticipated 45 anticipated to push $80 in FY’23 recapture higher 0 $- -45 ($80) -90 ($160) Q3'
Slide 16: Adj EPS Bridge
Adj EPS1 Bridge Q3’23 SEQUENTIAL AND YEAR-OVER YEAR Price/mix outpaced costs for second consecutive quarter 1) Non-GAAP measure. Please refer to appendix for reconciliation. $M USD AA February 2023 © 2023 EnerSys. All Rights Reserved. 16
Slide 17: Disciplined & Balanced Capital Allocation
Disciplined & Balanced Capital Allocation Capital Allocation FY’18 – FY’22 FY’23 YTD Healthy Balance Sheet (cumulative) Priorities $ millions $ millions • 2 – 3x target leverage Invest in Organic • ~$300M cash and cash equivalents 1 Growth (CapEx) ~$390 ~$58 • Strong cash generation outpaced by stra
Slide 18: Focusing on What We Can Control
Focusing on What We Can Control 1 Pricing – continue to execute pricing increases commensurate with cost increases Operating Efficiencies – reduce waste through EOS, including plant rationalization, productivity 2 improvements & inventory reductions balanced w/strategic buffers FX and Interest Rate
Slide 19: Compelling EnerSys Investment Case
Compelling EnerSys Investment Case BUILDING BLOCKS FOR CONTINUED SUCCESS 1 Provider of highly differentiated energy solutions 2 Full suite of technologies for a diverse set of end markets 3 Strategically aligned to large and growing markets fueled by industry megatrends 4 Healthy balance sheet with
Slide 20: Appendix
Appendix February 2023 © 2023 EnerSys. All Rights Reserved. 20
Slide 21: Q3'23 Results
Q3’23 Results Net Sales Adj Operating Earnings1 & Margin $920 Y/Y Change $899 +8% price +5% volume $85 (4%) FX, ~($35m) $ millions $ millions $844 $60 $65 7.2% 7.3% 9.2% Q3'22 Q2'23 Q3'23 Q3'22 Q2'23 Q3'23 Adj EBITDA1 & Margin Adj Diluted EPS1 $98 $1.27 $86 $1.11 $79 $1.01 $ millions 9.4% 9.5% 10.7%
Slide 22: Q3'23 Segment Financial Highlights
Q3’23 Segment Financial Highlights $MILLIONS; % AND BPS Y/Y GROWTH Net Sales Adj. Op Earnings1 Adj. OE1 Margin Volume +8% Price +9% Energy Systems $434 FX (4%) $26.5 6.1% ---------------------------- +169% +350 bps Reported +13% Volume +3% Price +8% Motive Power $362 FX (5%) $47.1 13.0% ------------
Slide 23: Inflation Reduction Act (IRA)
Inflation Reduction Act (IRA) F U N D I N G A L L O C AT I O N S A L I G N W I T H E N E R S Y S T E C H N O L O G Y • Lithium / TPPL / Other products in our product Manufacturing tax credit for Potential Annual Tax mix may qualify depending on energy density Direct Financial battery cells credits J
Slide 24: Recession Playbook
Recession Playbook I M PA C T & A C T I O N S T O M I T I G AT E S L O W D O W N Key Takeaways: LoB Resilience 1. Slowdown not evident yet, but being vigilant All • Extensive backlog & pent-up demand buffers impact • Supply chain normalizing provides mix benefit 2. Company has deep history of discip
Slide 25: Motive Power
Motive Power R E V E N U E H I S T O R I C A L LY T R E N D S W I T H G D P Americas MP Net Sales vs US GDP % Motive Power Strengths $140,000 vs Prior Cycles: 6% • Bolstered by movements from increased $120,000 4% automation & electrification of ICE forklifts $100,000 2% • Higher margin NexSys® main
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations February 2023 © 2023 EnerSys. All Rights Reserved. 26
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation F Y ’ 2 2 A D J U S T E D O P E R AT I N G E A R N I N G S February 2023 © 2023 EnerSys. All Rights Reserved. 27
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation FY’22 ADJUSTED DILUTED EPS February 2023 © 2023 EnerSys. All Rights Reserved. 28
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation FY’22 ADJUSTED DILUTED EPS (CONTINUED) February 2023 © 2023 EnerSys. All Rights Reserved. 29
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation C O N S TA N T C U R R E N C Y N E T S A L E S We define non-GAAP constant currency net sales as total net sales excluding the effect of foreign exchange rate movements, and we use it to determine the constant currency growth rate on a year-on-year basis. Non-GAAP constant cu
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation A D J U S T E D O P E R AT I N G E A R N I N G S February 2023 © 2023 EnerSys. All Rights Reserved. 31
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED EBITDA February 2023 © 2023 EnerSys. All Rights Reserved. 32
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED DILUTED EPS February 2023 © 2023 EnerSys. All Rights Reserved. 33
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED DILUTED EPS (CONTINUED) February 2023 © 2023 EnerSys. All Rights Reserved. 34
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED DILUTED EPS (CONTINUED) February 2023 © 2023 EnerSys. All Rights Reserved. 35
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED DILUTED EPS (CONTINUED) February 2023 © 2023 EnerSys. All Rights Reserved. 36
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation L E V E R A G E R AT I O February 2023 © 2023 EnerSys. All Rights Reserved. 37
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation ADJUSTED GROSS PROFIT Quarter ended ($ millions) January 1, 2023 October 2, 2022 January 2, 2022 Net Sales $ 920.2 $ 899.4 $ 844.0 Gross Profit $ 213.6 $ 194.9 $ 184.3 Inventory adjustment relating to exit activities (0.9) 1.5 — Adjusted Gross Profit $ 212.8 $ 196.4 $ 184.3 F
Slide 39: Thank you.
Thank you. For more information visit us at www.enersys.com EnerSys Global Headquarters EnerSys EMEA EnerSys Asia 2366 Bernville Road EH Europe GmbH 152 Beach Road Reading, PA 19605 | USA Baarerstrasse 18 Gateway East Building #11- 08 Tel. +1-610-208-1991 6300 Zug Singapore +1-800-538-3627 Switzerla