Lci Industries · NYSE:LCII
Lci Industries — Investor Presentation (February 2024)
31 slides from Lci Industries's investor presentation, Feb 26, 2024
Slide 1: LCI Industries Investor Presentation February 2024
LCI Industries Investor Presentation May 2022 1 LCI INDUSTRIES INVESTOR PRESENTATION February 2024
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: Diversified Operations
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: Brands and Core Competencies
LCI OVERVIEW Our 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 E
Slide 6: LCI Overview: Key Differentiators
LCI OVERVIEW 6 Multiple key differentiators advancing our leading position throughout our markets • Experienced leadership team with substantial industry knowledge • Centralized base in Indiana keeps leadership close with team members, supporting cohesive culture • 100,000+ retail customer interacti
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 We strive to drive superior returns to all of our teams...our PEOPLE, our CUSTOMERS and our SHAREHOLDERS 8 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 9: Innovation as a Culture
INNOVATION AS A CULTURE Constant innovation continues to drive long-term content expansion Continued focus on innovation has resulted in a record number of product introductions in the last 10 years 9 Independent Suspension Furrion® 18K Chill Cube Air Conditioner Solera® 3000 Off-Grid Series Solar a
Slide 10: Improving the Customer Experience for All
Improving the Customer Experience for all • Employing listening strategies across various customer touch points including end consumer, dealer, and OEM to create meaningful and desired improvements to products, processes, and services • Supporting nearly two million interactions through our Customer
Slide 11: 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 12: ESG Focus Areas
ESG FOCUS AREAS Driving long-term value creation through progress on ESG initiatives. Commitment to Sustainability Data monitoring and clean energy investment • Disclosure of scope 1 and 2 greenhouse gas emissions and data on energy consumption, waste management and recycling; CSR reported with refe
Slide 13: Our Business
OUR BUSINESS
Slide 14: RV OEM Net Sales
North American RV OEM Net Sales 2019 2020 2021 2022 2023 $0M $800M $1,600M $2,400M $3,200M 14 Key Drivers & Trends RV OEM - NET SALES Key Drivers • North American RV OEM revenues down 47% year- over-year due to a 37% reduction in industry wholesale shipments driven by current dealer inventory levels
Slide 15: Marine OEM Net Sales
Content per Wholesale Unit • Content per power boat of $1,244 for FY 2023 • Decline of 27% over the comparable prior year period driven by current dealer inventory levels, inflation, and elevated interest rates impacting retail consumers • Expanding catalog with products like our shallow water ancho
Slide 16: Aftermarket Net Sales Key Drivers & Trends
16 Key Drivers & Trends Key Drivers • Represents one of the strongest value drivers for LCI due to long runway for growth, counter-cyclicality, strong margin profile, and premium brands • Innovation driving ongoing portfolio expansion through sophisticated products, catering to the new generation of
Slide 17: International Business & Other Adjacencies Net Sales
17 Background & Trends INTERNATIONAL BUSINESS & OTHER ADJACENCIES - NET SALES Background • International: ◦ Tailored products in RV, marine, cargo trailers, and high-speed trains • Adjacencies: ◦ Building Products: Components for the manufactured and modular housing markets ◦ Transportation Products
Slide 18: Financial Overview
Free Cash Flow* ($M) $37 $211 $174 -$210 $472 $465 2018 2019 2020 2021 2022 2023 $(250)M $0M $250M $500M EBITDA* ($M) $266 $276 $321 $511 $682 $255 2018 2019 2020 2021 2022 2023 $0M $200M $400M $600M $800M Diversification and content expansion enabling market share gains and strong cash generation F
Slide 19: FY 2023 Financial Performance
Operating Margin 10.6% 3.3% 2022 2023 (in th ou sa nd s) Consolidated Net Income $394,974 $64,195 2022 2023 (in th ou sa nd s) EBITDA* $682,240 $255,196 2022 2023 FY 2023 FINANCIAL PERFORMANCE * Additional information regarding EBITDA, as well as reconciliation of this non-GAAP financial measure to
Slide 20: 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 21: Growth Strategy
GROWTH STRATEGY Prioritizing ample liquidity and investments back into the company Balanced Capital Allocation Strategy • Reduce leverage • Investment in the business, with focus on automation projects • Execute strategic acquisitions and divestitures • Return capital to shareholders Continue Execut
Slide 22: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility FINANCIAL OVERVIEW Healthy balance sheet with ample liquidity enables execution of strategic priorities December 31, 2023 December 31, 2022 Cash and Cash Equivalents $66M $47M Remaining Availability under Revolving Credit Facility $245M $307M Net Debt/EBI
Slide 23: Capital Deployment Strategy
CapEx Acquisitions Dividends Repurchases Capital Deployment Strategy FINANCIAL OVERVIEW Reduce leverage Disciplined reinvestment to drive growth Acquisitions that align to strategy and financial targets Return capital to shareholders Attractive dividend yield Opportunistic share repurchases Target n
Slide 24: Acquisition Strategy
Over 50 acquisitions in the last 20 years • Majority of last 20 acquisitions focused outside of North American RV industry Looking for: • Great leadership • Product innovation • Consistency with our core manufacturing disciplines • Niche markets • Favorable competitive landscape Typical synergies to
Slide 25: Appendix
APPENDIX
Slide 26: Consolidated Financials
Consolidated Financials APPENDIX ($ in millions except per share data) 2017 2018 2019 2020 2021 2022 2023 Net Sales $ 2,148 $ 2,476 $ 2,371 $ 2,796 $ 4,473 $ 5,207 $ 3,785 Operating Profit $ 214 $ 199 $ 200 $ 223 $ 398 $ 553 $ 123 % of Sales 10.0% 8.0% 8.4% 8.0% 8.9% 10.6% 3.3% Net Income $ 133 $ 14
Slide 27: Balance Sheet
Balance Sheet APPENDIX *Debt increase in 2019, 2020, and 2021 due to funding acquisitions and liquidity for COVID-19 shutdowns. ($ in millions) 2017 2018 2019 2020 2021 2022 2023 Cash & Equivalents $ 26 $ 15 $ 35 $ 52 $ 63 $ 47 $ 66 Accounts Receivable 82 122 200 269 320 214 215 Inventory 275 341 39
Slide 28: 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 29: Leverage Ratio Reconciliation of Non-GAAP Measures
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 30: 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 31: Industry Statistics Summary
APPENDIX LCl industries Industry Statistics Summary TOTAL RECREATIONAL VEHICLES (RV) Tora] Wholesate Units ™ Retail Units Dealer inventory Impact YTD LIM LT Month YTD LTM L e020 ‘ 369,788 6007 0s 30 53,351 16% 607,661 28.180, 565.470 25.171 25.171, 42.191 Ar ETD 61483 560.724 aegat e2ane se — 51,592
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