Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (November 2022)
33 slides from Lci Industries's investor presentation, Nov 17, 2022
Slide 1: LCI Industries Investor Presentation November 2022
LCI Industries Investor Presentation May 2022 1 LCI INDUSTRIES INVESTOR PRESENTATION November 2022
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements” with respect to our financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, acquisitions, plans and objectives of manag
Slide 3: LCI at a Glance
LCI AT A GLANCE A leading supplier of highly engineered components primarily to the OEMs of RVs, buses, trailers, trucks, boats, trains, manufactured housing, and their related aftermarkets * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most directly
Slide 4: LCI at a Glance
LCI AT A GLANCE Over the last three decades, LCI has strategically diversified operations into the RV adjacent market, aftermarket and marine industry; leaning into outdoor lifestyle movement * See the Appendix to this presentation for reconciliation of non-GAAP financial measures to the most direct
Slide 5: LCI Overview: Industry-Leading Brands and Core Competencies
LCI OVERVIEW Industry-Leading Brands and Core Competencies 7 Core Competencies Metal Fabrication & Welding Lamination Glass Fabrication Cut & Sew Power & Motion Systems Electronics Plastics Forming Applicable Across a Number of Customer Segments Recreational Vehicle Marine Transit & School Bus Eques
Slide 6: LCI Overview
LCI OVERVIEW 6 Since LCI was founded, we have always focused on the following:
Slide 7: Key Strategic Opportunities
KEY STRATEGIC OPPORTUNITIES Our long-term growth is guided by execution against four strategic pillars: 7 INNOVATION AS A CULTURE QUALITY LEADERSHIP & CULTURE CUSTOMER EXPERIENCE
Slide 8: Leadership & Culture
LEADERSHIP & CULTURE Our experienced leadership team has built a strong company culture from which LCI continues to grow. Andrew Namenye EVP & CLO 15 years of experience Nick Fletcher EVP & Chief HR Officer 36 years of experience Jason Lippert President & CEO 28 years of experience Brian Hall EVP &
Slide 9: Leadership & Culture
LEADERSHIP & CULTURE We strive to drive superior returns to all of our teams...our PEOPLE, our CUSTOMERS and our SHAREHOLDERS 9 Striving to Lead • A passion to win, coupled with a robust growth strategy, drives us to be a leader in every market we enter • Strong cultural underpinning has helped redu
Slide 10: Innovation as a Culture
INNOVATION AS A CULTURE Innovation Propelling our Differentiation Strategy Continuously developing new product innovations to meet increasing demand for technologically-advanced products 10 Independent Suspension Gate Defender Jack OneControl The Fort Temp & Propane Sensors Furrion Power Cord Set AB
Slide 11: Leader in Customer Experience
LEADER IN CUSTOMER EXPERIENCE Driving engagement through customer events and initiatives • Collecting valuable product insights through grassroots Lippert Scouts Program and Campground Project while strengthening the Lippert brand • Hosted 2nd annual Lippert Getaway RV Rally in 2022, attended by 400
Slide 12: Dedication to Quality
DEDICATION TO QUALITY Reputation for safe and reliable products enabling continued market share growth • Quality of our products leads to strong customer relationships, helping us win new business and increase our market share Focus on automation to maintain quality while supporting profitability •
Slide 13: Growth Opportunities
Leveraging our leading position in core OEM markets to grow into new markets Expanding organically and through M&A in Adjacent, Aftermarket, and International markets to enable consistent, long-term growth for LCI Capitalize on secular trends from the rapidly growing outdoor recreation industry Leve
Slide 14: Expanding Addressable Markets
EXPANDING ADDRESSABLE MARKETS $11 billion in combined growth opportunity through various markets as we expand our footprint and diversify offerings Unlocking value through diversification: (1) Amounts in millions. "Market Opportunity" amounts represent Management's estimate of the size of the addres
Slide 15: ESG Focus Areas
ESG FOCUS AREAS Driving long-term value creation through progress on ESG initiatives. Commitment to Sustainability Reducing the environmental impact in our operations • Solar power in seven locations prevent CO2 emissions equivalent to 1,349 passenger vehicles driven for a year • More than 67,000 to
Slide 16: Our Business
OUR BUSINESS
Slide 17: North American RV OEM Net Sales
North American RV OEM Net Sales 2017 2018 2019 2020 2021 TTM 9/30/22 $0M $800M $1,600M $2,400M $3,200M Growth Drivers & Trends RV OEM 12% CAGR Key Drivers • New consumers and their families enter the RV lifestyle and recognize the benefits of RVing, through increased accessibility such as peer-to- p
Slide 18: North American Marine OEM Net Sales
North American Marine OEM Net Sales 2017 2018 2019 2020 2021 TTM 9/30/22 $0M $100M $200M $300M $400M $500M Growth Drivers & Trends MARINE OEM 52% CAGR Key Drivers • Benefits from secular tailwinds within the outdoor recreation space, driving heightened long-term demand • Strong partnerships with lea
Slide 19: North America Aftermarket Growth Drivers & Trends
Growth Drivers & Trends NORTH AMERICA AFTERMARKET Key Drivers • Secular outdoor recreation trends driving Aftermarket businesses forward • Substantially expanded addressable market with 2021 acquisition of Furrion, opening an additional $1.5 billion opportunity within North America • Strong focus on
Slide 20: International Business & Other Adjacencies
Growth Drivers & Trends INTERNATIONAL BUSINESS & OTHER ADJACENCIES Key Drivers • International: ◦ Similar to North America, European consumers are increasingly turning to the outdoor lifestyle for travel and vacation across the continent, driving demand for LCI's products internationally • Adjacenci
Slide 21: Financial Overview
FINANCIAL OVERVIEW
Slide 22: Financial Overview: Sales, EBITDA, EPS, Free Cash Flow
Free Cash Flow* ($M) $159 $68 $37 $211 $174 -$210 $236 2016 2017 2018 2019 2020 2021 TTM 9/30/22 $(300)M $(200)M $(100)M $0M $100M $200M $300M EBITDA* ($M) $247 $269 $266 $276 $321 $511 $818 2016 2017 2018 2019 2020 2021 TTM 9/30/22 $0M $300M $600M $900M Continued focus on diversification leading to
Slide 23: Q3 2022 Financial Performance
Operating Margin 7.6% 7.7% Third Quarter 2021 Third Quarter 2022 (in th ou sa nd s) Consolidated Net Income $63,401 $61,392 Third Quarter 2021 Third Quarter 2022 (in th ou sa nd s) EBITDA* $117,965 $119,822 Third Quarter 2021 Third Quarter 2022 Q3 2022 FINANCIAL PERFORMANCE * Additional information
Slide 24: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility FINANCIAL OVERVIEW Healthy balance sheet with ample liquidity enables execution of strategic priorities Third Quarter 2022 Third Quarter 2021 Cash and Cash Equivalents $23M $73M Remaining Availability under Revolving Credit Facility $369M $267M Net Debt/E
Slide 25: Capital Deployment Strategy
Capital Deployment Strategy FINANCIAL OVERVIEW Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchases Target net debt / EBITDA leverage of 1.0x to 1.5x
Slide 26: Acquisition Strategy
Over 50 acquisitions in the last 20 years • Majority of last 20 acquisitions focused outside of North American RV industry Looking for: • Great leadership • Product innovation • Consistency with our core manufacturing disciplines • Niche markets • Favorable competitive landscape Typical synergies to
Slide 27: Appendix
APPENDIX
Slide 28: Consolidated Financials
Consolidated Financials APPENDIX ($ in millions except per share data) 2015 2016 2017 2018 2019 2020 2021 Net Sales $ 1,403 $ 1,679 $ 2,148 $ 2,476 $ 2,371 $ 2,796 $ 4,473 Operating Profit $ 116 $ 201 $ 214 $ 199 $ 200 $ 223 $ 398 % of Sales 8.3% 12.0% 10.0% 8.0% 8.4% 8.0% 8.9% Net Income $ 74 $ 130
Slide 29: Balance Sheet
Balance Sheet APPENDIX *Debt increase in 2019, 2020, and 2021 due to funding recent acquisitions and liquidity for COVID-19 shutdowns. ($ in millions) 2015 2016 2017 2018 2019 2020 2021 Cash & Equivalents $ 12 $ 86 $ 26 $ 15 $ 35 $ 52 $ 63 Accounts Receivable 42 57 82 122 200 269 320 Inventory 171 1
Slide 30: EBITDA Reconciliation of Non-GAAP Measures
EBITDA Reconciliation of Non-GAAP Measures APPENDIX EBITDA is a non-GAAP performance measure included to illustrate and improve comparability of its results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization e
Slide 31: Leverage Ratio (Net Debt to EBITDA) Reconciliation
Leverage ratio (net debt to EBITDA) Reconciliation of Non-GAAP Measures APPENDIX The Leverage Ratio (or Net Debt to EBITDA ratio) is a non-GAAP measure of the use of debt. The Leverage Ratio is calculated by dividing the total of long-term indebtedness, plus current portion of long-term debt, less c
Slide 32: Free Cash Flow Reconciliation of Non-GAAP Measures
Free cash flow Reconciliation of Non-GAAP Measures APPENDIX Free cash flow is a non-GAAP measure of liquidity, calculated by subtracting capital expenditures from net cash flows provided by operating activities. The Company considers free cash flow to be a profitability and liquidity measure that pr
Slide 33: Industry Statistics Summary
APPENDIX Industry Statistics Summary LClindustries TOTAL RECREATIONAL VEHICLES (RV) yorac Wholesale Units ™ 1_f Retail Units = 1f Dealer inventory impact Ton 0 Ta Tian Yo The Toe YD on Dee, Ws ate s8 oe OST. Was sae ws xn nC ant 4553030 45800308 2456 to DAES ats 53155 ‘aman aa] Feat 86 8 a4 296 a5ta
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