Westinghouse Air Brake Technologies Corporation · NYSE:WAB
Westinghouse Air Brake Technologies — Q3 2024 Earnings Presentation
27 slides from Westinghouse Air Brake Technologies's earnings presentation, Oct 23, 2024
Slide 1: Wabtec Financial Results & Company Highlights
THIRD QUARTER 2024 Wabtec Financial Results & Company Highlights
Slide 2: Forward Looking Statements & Non-GAAP Financial Information
FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL INFORMATION This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigati
Slide 3: Today's Participants
WABTEC TODAY’ S PARTICIPANTS RAFAEL JOHN KYRA SANTANA OLIN YATES President & Executive Vice President & Vice President, Chief Executive Officer Chief Financial Officer Investor Relations
Slide 4: 3Q 2024 Overview
WABTEC 3Q 2024 OVERVIEW 3Q 2024 HIGHLIGHTS SALES $2.66B Up 4.4% YOY Increased sales were driven by growth in the Freight & Transit Segments OPERATING 16.3% 19.7% Operating margin benefited from sales growth and improved gross margin MARGIN GAAP Adjusted EARNINGS PER $1.63 $2.00 GAAP EPS up 22.6% YoY
Slide 5: 2024 Market Expectations
WABTEC NORTH AMERICAN NORTH AMERICAN AVG 2024 MARKET FREIGHT CARLOADS ACTIVE LOCOMOTIVES 2.8% EXPECTATIONS 2.5% 2.1% 1.8% FAVORABLE / FREIGHT UNFAVORABLE NA Carloads + Active Locomotive Fleet 4Q23 1Q24 2Q24 3Q24 3Q21 3Q22 3Q23 3Q24 International Freight Source: Association of American Railroads Sour
Slide 6: Executing on Our Value Creation Framework
WABTEC EXECUTING ON OUR VALUE CREATION FRAMEWORK DRIVERS OF RECENT PORTFOLIO GROWTH WINS Accelerate innovation of scalable technologies Signed multi-year new locomotive order in Kazakhstan for $405 million Grow and refresh expansive global installed base Won long-term parts contract with Class 1 for
Slide 7: 3Q 2024 Financial Summary
WABTEC 3Q 2024 FINANCIAL SUMMARY I N CREASED S AL E STitle Chart , M ARGI N E XP AN SION AN D E P S GRO WT H Chart Title 3 SALES OP INCOME / OP MARGIN EPS 600 2.5 $2.66B $524M $2.55B 2.5 500 $457M 19.7% $2.00 $433M 2 17.9% $1.63 $1.70 +17.6% YOY 2 400 $370M 16.3% 1.5 +22.6% 14.5% $1.33 YOY 1.5 300 1
Slide 8: 3Q 2024 Sales
WABTEC 3Q 2024 SALES (in millions) PRODUCT LINE 3Q24 YOY 3Q KEY DRIVERS EQUIPMENT Equipment $513 (17.3)% Lower locomotive deliveries as planned, partially offset with increased mining sales Components $296 1.0% COMPONENTS International freight car & industrial growth offsetting N.A. freight car Digi
Slide 9: 3Q 2024 Consolidated Gross Profit
WABTEC 3Q 2024 CONSOLIDATED GROSS PROFIT ($ in millions) GAAP Adjusted 3Q KEY DRIVERS 2023 GROSS PROFIT $792 $805 VOLUME % Gross Profit Margin 31.0% 31.5% Higher Freight & Transit segment sales Volume ↑ ↑ MIX/PRICING Favorable mix of products within Freight segment, partially offset by Mix/Pricing ↑
Slide 10: 3Q 2024 Consolidated Operating Income
WABTEC 3Q 2024 CONSOLIDATED OPERATING INCOME ($ in millions) GAAP Adjusted 2023 OP INCOME $370 $457 % Operating Margin 14.5% 17.9% Gross Profit 88 82 SG&A (23) (18) Engineering 3 3 Amortization (5) - 2024 OP INCOME $433 $524 % Operating Margin 16.3% 19.7% OP MARGIN BENEFITED FROM HIGHER SALES AND IN
Slide 11: 3Q 2024 Freight Segment Performance
WABTEC 3Q 2024 FREIGHT SEGMENT PERFORMANCE Chart Title SALES OP INCOME / OP MARGIN Chart Title 12-MONTH BACKLOG 2.5 500 $467M 6 $5.59B $5.25B 450 2 $1.88B $1.93B(2) $390M $397M 24.1% 5 400 21.2% 350 $325M 20.2% 4 1.5 300 17.3% 250 3 1 200 2 150 0.5 100 1 50 0 0 0 2023 2024 2023 2 0 2 4 Category 12 0
Slide 12: 3Q 2024 Transit Segment Performance
WABTEC 3Q 2024 TRANSIT SEGMENT PERFORMANCE Chart Title SALES OP INCOME / OP MARGIN Chart Title 12-MONTH BACKLOG 800 2.5 $733M(1) 100 $93M 700 $669M 90 $85M 12.8% $2.04B $79M 80 12.5% 2 $1.84B 600 $70M 10.8% 70 500 10.3% 1.5 60 400 50 300 40 1 30 200 20 0.5 100 10 0 0 0 2023 2024 2023 2 0 2 4 Categor
Slide 13: Resilient Business Allows for Execution on Financial Priorities
WABTEC RESILIENT BUSINESS ALLOWS FOR EXECUTION ON FINANCIAL PRIORITIES FOCUSED ON CASH CONVERSION ( 1 ) DISCIPLINED CAPITAL ALLOCATION YTD CASH FROM OPS $1,111M (4) Strong balance sheet and financial 90% Cash Conv position … liquidity of $1.90B (3) YTD 2023 (1) YTD 2024 $1,111M Share Share repurchas
Slide 14: 2024 Updated Financial Guidance
WABTEC 2 0 2 4 U p d a t e d F i n a n c i a l G u i d a n c e (1,2) PRIOR GUIDANCE UPDATED GUIDANCE REVENUES REVENUES $10.25B to $10.55B $10.25B to $10.55B ADJUSTED DILUTED EPS ADJUSTED DILUTED EPS $7.20 to $7.50 $7.45 to $7.65 C A S H C O N V E R S I O N (3) C A S H C O N V E R S I O N (3) >90% >9
Slide 15: Key Takeaways - Year Outlook
WABTEC KEY TAKEAWAYS 5 - Y E A R O U T L O O K (1) MSD CORE ORGANIC GROWTH CAGR 01 Strong revenue growth, margin expansion, increased earnings, and improved cash flow 02 250 – 300 BPS MARGIN EXPANSION Positive productivity driven by continuous cost improvement combined with realization of Integratio
Slide 16: Income Statement
APPENDIX A ( 1 of 2) INCOME STATEMENT WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended Nine Months Ended September 30,
Slide 17: Income Statement (cont.)
APPENDIX A ( 2 of 2) INCOME STATEMENT (CONT.) WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended Nine Months Ended Septe
Slide 18: Balance Sheet
APPENDIX B BALANCE SHEET WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30, 2024 December 31, 2023 In millions Cash, cash equivalents and restricted cash $ 410 $ 620 Receivables, net 1,782 1,684 Inventories, net 2,380 2,284 Other current a
Slide 19: Cash Flow
APPENDIX C CASH FLOW WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, 2024 2023 In millions Operating activities Net income $ 854 $ 608 Non-cash expense 387 372 Receivables (92) (214) Inventories (115) (201) A
Slide 20: EPS and Non-GAAP Reconciliation (1 of 3)
APPENDIX D (1 of 3) EPS AND NON-GAAP RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comp
Slide 21: EPS and Non-GAAP Reconciliation (2 of 3)
APPENDIX D (2 of 3) EPS AND NON-GAAP RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comp
Slide 22: EPS and Non-GAAP Reconciliation (3 of 3)
APPENDIX D (3 of 3) EPS AND NON-GAAP RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comp
Slide 23: EBITDA Reconciliation
APPENDIX E EBITDA RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. Non-GAAP f
Slide 24: Sales by Product Line
APPENDIX F SALES BY WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION PRODUCT LINE SALES BY PRODUCT LINE (UNAUDITED) Three Months Ended September 30, In millions 2024 2023 Freight Segment Equipment $ 513 $ 620 Components 296 293 Digital Intelligence 204 181 Services 917 787 Total Freight Segment $ 1,9
Slide 25: Segment Gross Margin & Operating Margin Reconciliation
APPENDIX G SEGMENT GROSS MARGIN & OPERATING MARGIN RECONCILIATION WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF REPORTED RESULTS TO ADJUSTED RESULTS - BY SEGMENT (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Income from Income fr
Slide 26: Segment Sales Reconciliation
APPENDIX H SEGMENT SALES RECONCILIATION WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION RECONCILIATION OF CHANGES IN NET SALES - BY SEGMENT (UNAUDITED) Three Months Ended September 30, In millions Freight Transit Consolidated 2023 Net Sales $ 1,881 $ 669 $ 2,550 Acquisitions 2 - 2 Foreign Exchange (
Slide 27: Cash Conversion Reconciliation
APPENDIX I CASH CONVERSION RECONCILIATION Set forth below is the calculation of the non-GAAP performance measures included in this press release. We believe that these measures provide useful supplemental information to assess our operating performance and to evaluate period-to-period comparisons. N
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