Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q2 2022 Earnings Presentation
28 slides from Vertiv's earnings presentation, Aug 3, 2022
Slide 1: Second Quarter 2022 Results
Second Quarter 2022 Results August 3, 2022 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Company”) may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to V
Slide 3: Second quarter 2022 key messages
Second quarter 2022 key messages Organic net sales up 8% compared to last year’s second quarter with strong growth across all geographic regions. Second quarter orders up 17% from prior year with 11% from higher volumes, 10% from higher pricing and (4%) foreign exchange headwind. Second quarter adju
Slide 4: Market Environment
Market Environment SEGMENT AMERICAS APAC EMEA April-22 August-22 April-22 August-22 April-22 August-22 CLOUD / HYPERSCALE COLOCATION + + + + ENTERPRISE / SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS COMMERCIAL & INDUSTRIAL Orders remain strong notwithstanding continued aggressive pricing actions C
Slide 5: Customer demand and supply chain update
Customer demand and supply chain update CUSTOMER DEMAND & PRICING UPDATE SUPPLY CHAIN & INFLATION UPDATE • Overall market demand remains robust. Second • Supply chain challenges – notably for electronic quarter orders up ~17% compared to same period components – continued in second quarter. Expect l
Slide 6: Second quarter 2022 financial results
Second quarter 2022 financial results $Millions Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Free Cash Flow Up ~11% Down $52M Down 470 bps Down $0.21 Down $273M Organic up ~8% 41 (232) 1,399 $0.31 1,260 134 10.6% 82 5.9% $0.10 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022
Slide 7: Second quarter 2022 segment results
Second quarter 2022 segment results $Millions Americas ➢ Organic growth driven by price realization with volume Net sales relatively flat. E&I added ~$47M. FX headwind (~$2M). ➢ Operating margins lower due to unfavorable price-cost, Up 14.6% Up 2.3% Up 16.0% higher fixed costs and other cost headwin
Slide 8: Third quarter 2022 financial guidance
Third quarter 2022 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Up 20% Down $1 - Up $19M Down 130 bps Up $0.03 Organic up 19% ~1,480 1,229 130-150 10.7% 131 ~9.4% ~$0.23 $0.20 Q3 2021 Q3 202
Slide 9: Full year 2022 financial guidance
Full year 2022 financial guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adj. Diluted EPS Free Cash Flow Up 15% Up 1 - 6% Down 90 bps Down $0.12 Down $111 - $161 Organic +13.5% ~5,735 4,998 475-500 136 471 9.4% $0.76 ~8.
Slide 10: Full year bridge from prior guidance
Full year bridge from prior guidance $Millions; midpoint of guidance range unless otherwise specified • Foreign exchange driven by declines in EUR (~10%) and CNY (~6%) rates vs. prior guidance assumptions Net Sales Adjusted Operating Profit • Volume estimates higher on improved supply environment in
Slide 11: Sequential Q3 to Q4 bridge
Sequential Q3 to Q4 bridge • Volume increase driven by improved supply and ramp $Millions; midpoint of guidance range unless otherwise specified of Monterrey, Mexico facility in AMER as well as normal seasonality in China and EMEA Net Sales AOP • SIOP and other process enhancements in Americas Q3 Gu
Slide 12: 2022 financial guidance by quarter
2022 financial guidance by quarter $Millions; midpoint of guidance range unless otherwise specified Updated Guidance – Net Sales Updated Guidance – Organic Sales Growth from 2021 Volume (3%) +2% +11% +14% (1%) +12% ~3,180 Pricing +4% +6% +9% +10% +5% +9% 2,556 560 320 240 ~1,700 190 320 1,399 ~1,480
Slide 13: 2022 financial guidance by quarter
2022 financial guidance by quarter $Millions; midpoint of guidance range unless otherwise specified Updated Guidance - Adjusted Operating Profit Updated Guidance - Adjusted Operating Margin ~15% 240-265 380-405 ~12% ~9% 134 130-150 6% 131 112 94 82 4% 95 1% 13 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 H1 H2 Q1 Q2 Q3
Slide 14: 2022 regional adjusted operating margin progression
2022 regional adjusted operating margin progression midpoint of guidance range unless otherwise specified Americas APAC ~20% ~18% ~19% ~18% ~18% 17% 15% ~16% 13% 12% 13% 11% Q1 Q2 Q3 Q4 H1 H2 Q1 Q2 Q3 Q4 H1 H2 EMEA Total Vertiv ~28% ~24% ~15% ~20% ~12% 18% 15% ~9% 12% 6% 4% 1% Q1 Q2 Q3 Q4 H1 H2 Q1 Q
Slide 15: Expecting strong 2023
Expecting strong 2023 MARKET UPDATE REASONS FOR OPTIMISM • Cloud revenue growing at each major cloud company • Sequential adjusted operating margin improvement highlighting the robust underlying demand expected in all regions through 2022 • Colocation metrics continue to be strong across the • Order
Slide 16: Second quarter 2022 key messages
Second quarter 2022 key messages Organic net sales up 8% compared to last year’s second quarter with strong growth across all geographic regions. Second quarter orders up 17% from prior year with 11% from higher volumes, 10% from higher pricing and (4%) foreign exchange headwind. Second quarter adju
Slide 17: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 18: Non-GAAP financial measures – second quarter results
Non-GAAP financial measures –second quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | 2nd QUARTER) 2Q22 2Q21 D ($M | 2nd
Slide 19: Non-GAAP financial measures – second quarter results (cont.)
Non-GAAP financial measures – second quarter results (cont.) Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Loss on Operating profit Interest extinguishment Change in Income tax ($M, except EPS | 2nd QUARTER 2022) (loss) expense,
Slide 20: Non-GAAP financial measures – 2022 guidance
Non-GAAP financial measures – 2022 guidance At midpoint of guidance range Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M, except EPS | 3rd QUARTER 2022(1)) (loss) expense, net wa
Slide 21: Non-GAAP financial measures – 2022 guidance continued
Non-GAAP financial measures – 2022 guidance continued At midpoint of guidance range Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax Net income ($M, except EPS | 4th QUARTER 2022(1)) (
Slide 22: Non-GAAP financial measures – FY21 and 1Q22 results
Non-GAAP financial measures –FY21 and 1Q22 results Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin ($M | 3rd QUARTER) 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 Net sales $1,098.4 $1,260.3 $1,228.9 $1,410.5 $4,998.1 $1,156.4 Operating profit 79.8 102.2 81.8 (3.9) 259
Slide 23: Non-GAAP financial measures – FY21 and 1Q22 results
Non-GAAP financial measures –FY21 and 1Q22 results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted operating profit (loss) ($M) 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 Americas $126.4 $128.6 $113.4 $72.8 $441.2 $57.9 Asia Pacific 53.1 62.8 69.4 68.1 253.4 41.5 Europe,
Slide 24: Non-GAAP financial measures – 3rd quarter 2021
Non-GAAP financial measures – 3rd quarter 2021 Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Change in Income tax ($M, except EPS | 3rd QUARTER 2021) (loss) expense, net warrant liability
Slide 25: 2022 pricing and inflation guidance by quarter
2022 pricing and inflation guidance by quarter $Millions – year-over-year impact excluding E&I Updated Guidance • Second quarter inflation was slightly ~360 higher than prior outlook driven largely by ~130 ~290 electronic components ~110 ~85 ~80 ~90 • Second quarter pricing of $80M (6%) ~70 was at p
Slide 26: Full year 2022 adjusted operating profit vs. 2021
Full year 2022 adjusted operating profit vs. 2021 $Millions; FY 2022 at midpoint of guidance • Pricing includes ~$120M actual, ~$180M in Q2 2022 backlog and ~$60M in expected book and ship orders 105 • E&I 2022 adjusted operating profit of ~$67M less ~$7M in 2021 60 (290) • Volume benefit of ~$305M
Slide 27: Key FX rates and other modeling assumptions
Key FX rates and other modeling assumptions $Millions unless otherwise specified 2H Assumptions Sales Exposure by Currency USD / CNY $0.1492 CNY 15% USD / EUR $1.0184 EUR 12% USD / GBP $1.1922 GBP 8% USD / INR $0.0127 INR 6% Other non-USD 15% 1-mo LIBOR (Q3) 2.50% Total non-USD 56% 1-mo LIBOR (Q4) 3
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