Eaton Corporation, PLC · NYSE:ETN
Eaton — Q1 2021 Earnings Presentation
18 slides from Eaton's earnings presentation, May 4, 2021
Slide 1: First Quarter 2021 Earnings Release
First Quarter 2021 Earnings Release May 4, 2021 Craig Arnold © 2021 Eaton. All rights reserved.
Slide 2: Forward-looking Statements and Non-GAAP Financial Information
Forward-looking Statements and Non-GAAP Financial Information This presentation or the comments we make on our call today contain forward-looking statements concerning, among other matters, 2021 organic revenue growth, adjusted earnings per share, free cash flow, adjusted free cash flow, operating c
Slide 3: Recent Highlights
Recent Highlights • Adjusted earnings per share of $1.44 • Sales of $4.7B • Organic revenue up ½% • Acquisitions +1% and divestitures (5½)% • Segment margins of 17.7%, up 190bps versus 1Q20, a Q1 record • Incremental profit of +$73M on $97M lower revenues • Robust adjusted operating cash flow of $46
Slide 4: New M&A Highlights
New M&A Highlights Green Motion (closed) HuanYu High Tech (closed) Jiangsu YiNeng (announced) Fully-owned 50% stake, non-consolidated 50% stake, non-consolidated Swiss manufacturer of electric vehicle Chinese manufacturer of low-voltage Chinese manufacturer of high power charging hardware and softwa
Slide 5: Financial Summary
Financial Summary (M) 1Q ’21 1Q ’20 V ’20 Sales $4,692 $4,789 2% Segment Operating Profit 831 758 10% Segment Operating Margin 17.7% 15.8% 190 bps Adjusted Earnings 577 514 12% Adjusted EPS $1.44 $1.25 15% Sales Growth: Organic ½% • Record Q1 Adjusted EPS $1.44 Acquisition / Divestiture (4½)% • Reco
Slide 6: Electrical Americas Segment
Electrical Americas Segment (M) 1Q ’21 1Q ’20 V ’20 Sales $1,622 $1,788 9% Operating Profit 332 308 8% Operating Margin 20.5% 17.2% 330 bps Sales Growth: Organic 2% • Q1 orders up 11% with particular strength in Acquisition / Divestiture (12)% data center and residential markets Forex 1% • Orders up
Slide 7: Electrical Global Segment
Electrical Global Segment (M) 1Q ’21 1Q ’20 V ’20 Sales $1,253 $1,144 10% Operating Profit 213 166 28% Operating Margin 17.0% 14.5% 250 bps Sales Growth: Organic 5% • Q1 orders up 7% with particular strength in Forex 5% data center, residential and utility markets Total 10% • Orders down (5)% on a r
Slide 8: Hydraulics Segment
Hydraulics Segment (M) 1Q ’21 1Q ’20 V ’20 Sales $561 $507 11% Operating Profit 84 55 53% Operating Margin 15.0% 10.8% 420 bps Sales Growth: Organic 9% • Q1 orders up 53% driven by strength in mobile Forex 2% equipment markets Total 11% © 2021 Eaton. All rights reserved. 8
Slide 9: Aerospace Segment
Aerospace Segment (M) 1Q ’21 1Q ’20 V ’20 Sales $519 $680 24% Operating Profit 96 147 35% Operating Margin 18.5% 21.6% 310 bps Sales Growth: Organic (26)% • Orders down (36)% on rolling 12 month basis Forex 2% driven by the downturn in commercial markets Total (24)% • Backlog down (11)% y-o-y • Anno
Slide 10: Vehicle Segment
Vehicle Segment (M) 1Q ’21 1Q ’20 V ’20 Sales $654 $598 9% Operating Profit 113 81 40% Operating Margin 17.3% 13.5% 380 bps Sales Growth: Organic 9% • Organic growth driven by commercial vehicles Total 9% globally and light motor vehicles in China • Record Q1 margin performance with robust increment
Slide 11: eMobility Segment
eMobility Segment (M) 1Q ’21 1Q ’20 V ’20 Sales $83 $72 15% Operating Profit (Loss) (7) 1 --- Operating Margin (8.4)% 1.4% 9.8 pts Sales Growth: Organic 13% • Organic revenues driven by growth in global markets Forex 2% • Margin decline driven by additional R&D investments Total 15% © 2021 Eaton. Al
Slide 12: 2021 Organic Growth Guidance
2021 Organic Growth Guidance February May Organic Revenue Growth Organic Revenue Growth Segment Guidance Guidance Electrical Americas 3 – 5% 6 – 8% Electrical Global 3 – 5% 7 – 9% Hydraulics (1) 4 – 6% 7 – 9% Aerospace 2 – 4% 2 – 4% Vehicle 10 – 12% 16 – 18% eMobility 14 – 16% 17 – 19% Eaton 4 – 6%
Slide 13: 2021 Segment Margin Guidance
2021 Segment Margin Guidance February May Segment Operating Margin Segment Operating Margin Segment Guidance Guidance Electrical Americas 20.1% – 20.7% 20.4% – 20.8% Electrical Global 16.1% – 16.7% 16.8% – 17.2% Hydraulics (1) 11.7% – 12.3% 14.8% – 15.2% Aerospace 19.7% – 20.3% 19.8% – 20.2% Vehicle
Slide 14: 2021 Guidance
2021 Guidance 2021 Full Year Outlook Adjusted Earnings Per Share $5.90 - $6.30 Organic Revenue 7 – 9% Currency Translation $200M Acquisition & Divestiture (4)% Segment Operating Margins 18.1% - 18.5% Corporate Expenses (interest, pension, other corporate) Flat with 2020 Tax Rate on Adjusted Earnings
Slide 15: Summary
Summary • Eaton is an intelligent power management company with differentiated businesses in large global markets • Our businesses are supported by accelerating secular growth trends reflected in higher organic growth targets of 4% - 6% • Our strategy is working as reflected in more consistent earni
Slide 16: © 2021 Eaton. All rights reserved.
© 2021 Eaton. All rights reserved. 16
Slide 17: Appendix
Appendix © 2021 Eaton. All rights reserved. 17
Slide 18: Appendix
Appendix © 2021 Eaton. All rights reserved. 18