Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Q2 2024 Earnings Presentation
25 slides from Vertiv's earnings presentation, Jul 24, 2024
Slide 1: Second Quarter 2024 Results
Second Quarter 2024 Results July 24, 2024
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 2024 key messages
Second quarter 2024 key messages Organic net sales up ~14% compared to second quarter 2023 driven by double-digit growth in AMER and EMEA, and continued demand recovery in APAC. Strong orders growth – up ~57%1 from second quarter 2023 and up ~10% 1 from first quarter 2024; sequential growth primaril
Slide 4: Market environment outlook
Market environment outlook SEGMENT AMERICAS APAC EMEA Feb-2024 July-2024 Feb-2024 July-2024 Feb-2024 July-2024 CLOUD / HYPERSCALE COLOCATION ENTERPRISE / SMALL & MEDIUM BUSINESS COMMUNICATION NETWORKS COMMERCIAL & INDUSTRIAL Underlying market demand remains strong • Continued positivity in Cloud & C
Slide 5: Customer demand, operations, and procurement update
Customer demand, operations, and procurement update Customer demand Operations and Procurement update • Second quarter orders exceeded expectations, up ~57%1 from second • Geopolitical tensions remain a risk area. We will continue to monitor and quarter 2023 and up ~10%1 sequentially from first quar
Slide 6: Service is where execution and scalability intersects to enable AI infrastructure
Service is where execution and scalability intersects to enable AI infrastructure Vertiv’s vast global service network is ready to consult, startup and maintain critical resilience • Providing unmatched Critical Digital Infrastructure 24/7 support with 300+ service centers and 3,750+ field service e
Slide 7: Second quarter 2024 financial results
Second quarter 2024 financial results $Millions; deltas to midpoint of guidance range 1,953 382 19.6% $0.67 333 1,734 14.5% 251 $0.46 227 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 • • + + • − + − • − • • Strong second quarter results driven by organic growth and
Slide 8: Second quarter 2024 financial results
Second quarter 2024 financial results $Millions • • • • • Adjusted • operating profit $192 $285 $38 $32 $80 $109 Q2 2024 Earnings Note: see “Non-GAAP Financial Measures” beginning on slide 13 of the Appendix. 8
Slide 9: Third quarter 2024 financial guidance
Third quarter 2024 financial guidance $Millions; midpoint of guidance range unless otherwise specified ~1,960 ~385 ~19.6% ~$0.67 1,743 17.0% 296 0.52 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 • • + • + • • • + − Anticipate continued organic sales growth and margin expansion Q2
Slide 10: Full year 2024 financial guidance
Full year 2024 financial guidance $Millions; midpoint of guidance range unless otherwise specified ~7,665 ~1,435 ~18.7% ~$2.50 ~875 6,863 778 15.3% 1,054 $1.77 FY 2023 FY 2024 FY 2023 FY 2024 FY 2023 FY 2024 FY 2023 FY 2024 FY 2023 FY 2024 • • + • + + • • − + • • − − Raising full-year financial guid
Slide 11: Key takeaways
Key takeaways 19.6% adj. operating margin in second quarter 2024 driven by higher contribution margin and fixed cost leverage. Exceeded guidance for second quarter across all financial metrics, continuing momentum from a strong first quarter. Second quarter 2024 orders up ~57%1 vs. second quarter 20
Slide 12: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations 12
Slide 13: Non-GAAP financial measures – second quarter results
Non-GAAP financial measures – second quarter results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin operating profit (loss) ($M | 2nd QUARTER) 2Q24 2Q23 ($M | 2n
Slide 14: Non-GAAP financial measures – second quarter results (cont.)
Non-GAAP financial measures – second quarter results (cont.) Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Loss on Income Operating profit Interest extinguishment Change in tax expense ($M, except EPS | 2nd QUARTER 2024) (loss)
Slide 15: Non-GAAP financial measures – third quarter 2024 guidance
Non-GAAP financial measures – third quarter 2024 guidance Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Income tax Net income ($M, except EPS | 3rd QUARTER 2024(1)) (loss) expense, net expense (loss) Di
Slide 16: Non-GAAP financial measures – fourth quarter 2024 guidance
Non-GAAP financial measures – fourth quarter 2024 guidance Reconciliation of diluted EPS to adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss) Operating profit Interest Income tax Net income ($M, except EPS | 4th QUARTER 2024) (loss) expense, net expense (loss) Dilu
Slide 17: Non-GAAP financial measures – FY 2024 guidance
Non-GAAP financial measures – FY 2024 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 ($M, except EPS | FULL YEAR 2024) (loss) expense, net warrant
Slide 18: Non-GAAP financial measures: Q1 2023 – Q2 2024 results
Non-GAAP financial measures: Q1 2023 – Q2 2024 results Net Sales(1) ($M) 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Americas $862.3 $959.4 $1,003.2 $1,019.6 $3,844.5 $925.0 $1,121.1 APAC 313.0 395.8 388.6 430.4 1,527.8 332.3 409.1 EMEA 345.8 378.9 350.8 415.4 1,490.9 381.8 422.6 Total $1,521.1 $1,734.1 $1,7
Slide 19: Non-GAAP financial measures: Q1 2023 – Q2 2024 results
Non-GAAP financial measures: Q1 2023 – Q2 2024 results Reconciliation from operating profit (loss) margin to adjusted operating profit (loss) margin ($M) 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Net sales $1,521.1 $1,734.1 $1,742.6 $1,865.4 $6,863.2 $1,639.1 $1,952.8 Operating profit 130.3 205.8 250.9 285
Slide 20: Non-GAAP financial measures: Q1 2023 – Q2 2024 results
Non-GAAP financial measures: Q1 2023 – Q2 2024 results Reconciliation of segment operating profit (loss) to operating profit (loss) and adjusted operating profit (loss) ($M) 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Americas $145.8 $191.7 $206.5 $218.4 $762.4 $187.8 $285.1 Asia Pacific 16.6 38.2 49.7 42.9
Slide 21: Non-GAAP financial measures – organic net sales growth reconciliation
Non-GAAP financial measures – organic net sales growth reconciliation Reconciliation of change in net sales to organic change in net sales Organic Net Sales Δ FX Δ growth Organic Δ % (1) ($M | 2nd QUARTER 2024) Americas: $161.7 $3.1 $164.8 17.2% Asia Pacific: 13.3 9.1 22.4 5.7% EMEA: 43.7 7.4 51.1 1
Slide 22: Key FX modeling assumptions
Key FX modeling assumptions $Millions unless otherwise specified FX translation impact1 2024 vs. 2023 2H24 Assumption Q1 Q2 Q3 FY CNY / USD 7.27 Sales (5) (20) ~(20) ~(70) USD / EUR $1.07 USD / GBP $1.28 Adj. OP 2 (3) ~(5) ~(10) INR / USD 83.33 1) Excludes FX transaction gain / (loss) within regions
Slide 23: Share count assumptions
Share count assumptions Millions of shares unless otherwise specified GAAP 1Q 2Q 3Q FY Basic 379 375 375 377 Potential Dilutive Stock Options & RSUs N/A 9 10 10 Diluted 379 384 385 387 Pro-forma diluted shares* 389 * All potentially dilutive equity instruments for the first quarter 2024 were conside
Slide 24: Additional Tax Information
Additional Tax Information • The second quarter 2024 included an expense (~$25M) related to Effective Tax Rate (ETR) Reconciliation a change in fair value of warrants. Although this expense is not Guidance considered in calculating GAAP tax expense for a full year, for 1Q24 2Q24 3Q24 FY24 individual
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