Regal Rexnord Corporation · NYSE:RRX
Regal Rexnord — Q2 2022 Earnings Presentation
26 slides from Regal Rexnord's earnings presentation, Aug 2, 2022
Slide 1: Second Quarter 2022 Earnings
Creating a better tomorrow™… Second Quarter 2022 Earnings August 2, 2022 Louis Pinkham, Chief Executive Officer Rob Rehard, Vice President, Chief Financial Officer
Slide 2: 2Q 2022 Forward Looking Statements
2Q 2022 FORWARD LOOKING STATEMENTS This press release contains forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which reflect Regal Rexnord’s current estimates, expectations and projections about Regal Rexnord’s future results, perform
Slide 3: 2Q 2022 Non-GAAP Financial Measures
2Q 2022 NON-GAAP FINANCIAL MEASURES We prepare financial statements in accordance with accounting principles generally accepted evaluate our business and forecast our future results. Accordingly, we believe disclosing and in the United States of America (“GAAP”). We also periodically disclose certai
Slide 4: Opening Comments & Overview; 2Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 5: 2Q 2022 Opening Comments
2Q 2022 OPENING COMMENTS • Strong Organic Sales Growth, Positive Price/Cost, GM & EBITDA Margin Expansion ($ in millions, except per share data) 2Q 2021 2Q 2022 • Remain Focused On Controllable Execution • Turnaround Momentum At Industrial Exemplifying Adjusted Net Sales* $886.9 $1,349.4 Power Of RB
Slide 6: Industrial Powertrain Momentum
2Q 2022 INDUSTRIAL POWERTRAIN MOMENTUM Recent Powertrain Solution Wins Evidence Differentiated, Value-Added Solutions in Attractive End Markets 60 HP Motor Customer Problem Planetary Gearbox & Coupling Brake An automation OEM re-designing production lines wanted an optimized solution that delivered
Slide 7: Opening Comments & Overview; 2Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 8: Motion Control Solutions
2Q 2022 MOTION CONTROL SOLUTIONS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) ($ Millions) • Organic Sales* Up 6.4% • Key Drivers $599.3 $158.1 • General Industrial • Marine $39.0 • Metals & Mining • Alt. Energy (-) Adjusted EBITDA Margin* • 26.4% of Adj. Net Sales $21.3 $58.2 $215.1 $189
Slide 9: Climate Solutions
2Q 2022 CLIMATE SOLUTIONS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) ($ Millions) • Organic Sales* Up 14.8% • Key Drivers • N.A. Resi HVAC $166.9 • General Industrial $268.4 166.9 $293.5$268.4 Adjusted EBITDA Margin* $257.3 $54.1 • 17.1% of Adj. Net Sales $50.3 2Q21 2Q22 2Q21 2Q22 * Non
Slide 10: Commercial Systems
2Q 2022 COMMERCIAL SYSTEMS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) ($ Millions) • Organic Sales* Up 14.6% • Key Drivers • N.A. General Industrial $301.9 • Pool Pump • C-HVAC $269.3 Adjusted EBITDA Margin* $49.9 • 16.5% of Adj. Net Sales $42.5 2Q21 2Q22 2Q21 2Q22 * Non-GAAP Financial
Slide 11: Industrial Systems
2Q 2022 INDUSTRIAL SYSTEMS Sales Adjusted Net Sales* Adjusted EBITDA* ($ Millions) ($ Millions) • Organic Sales* Up 9.4% • Key Drivers • General Industrial $154.7 Adjusted EBITDA Margin* $145.2 • 16.2% of Adj. Net Sales $25.0 $11.4 2Q21 2Q22 2Q21 2Q22 * Non-GAAP Financial Measurement, See Appendix f
Slide 12: Key Financial Metrics & Other Updates
2Q 2022 KEY FINANCIAL METRICS & OTHER UPDATES Capital Expenditures Balance Sheet at June 30, 2022 • $19.2 Million in 2Q 2022 • Total Debt of $2,163.1 Million • Net Debt of $1,460.6 Million Effective Tax Rate (ETR) • Net Debt/Adj. Bank EBITDA* of 1.5 • 21.9% Adj. ETR* in 2Q 2022 • Net Debt/Adj. Bank
Slide 13: Updating 2022 Outlook
2Q 2022 UPDATING 2022 OUTLOOK • Raising Adjusted Diluted Earnings per Share* Range to $10.20 to $10.80 from $10.10 to $10.70. • Now Expect Organic Revenue Growth at a High Single Digit Rate. Modeling Items • Stock-Based Compensation of $25M • Depreciation of $130M • Amortization of $188M • Interest
Slide 14: Opening Comments & Overview; 2Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 15: Opening Comments & Overview; 2Q 2022 Results, 2022 Outlook; Questions & Answers
4Q 2021 Creating a better tomorrow™… Opening Comments & Overview LOUIS PINKHAM, CEO 2Q 2022 Results, 2022 Outlook ROB REHARD, CFO Questions & Answers Closing Remarks LOUIS PINKHAM, CEO
Slide 16: Adjusted Diluted Earnings Per Share
2Q 2022 APPENDIX ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Six Months Ended Jun 30, Jul 3, Jun 30, Jul 3, 2022 2021 2022 2021 GAAP Diluted Earnings Per Share $ 2.12 $ 2.06 $ 3.96 $ 3.74 Restructuring and Related Costs (0.01) 0.11 0.18 0.14 Transaction and Related Costs 0.01 0.19 0.05 0.
Slide 17: 2022 Adjusted Annual Guidance
2Q 2022 APPENDIX 2022 ADJUSTED ANNUAL GUIDANCE Minimum Maximum 2022 Diluted EPS Annual Guidance $ 7.01 $ 7.61 Restructuring and Related Costs 0.68 0.68 Transaction and Related Costs 0.06 0.06 Gain on Sales of Assets (0.04) (0.04) Inventory Step Up 0.10 0.10 Intangible Amortization 2.10 2.10 Share-Ba
Slide 18: Adjusted EBITDA - Three Months Ended
2Q 2022 APPENDIX Three Months Ended Commercial Motion Control ADJUSTED EBITDA Systems Industrial Systems Climate Solutions Solutions Total Regal Rexnord (Dollars in Millions) Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Slide 19: Adjusted EBITDA - Six Months Ended
2Q 2022 APPENDIX Six Months Ended Commercial Motion Control ADJUSTED EBITDA Systems Industrial Systems Climate Solutions Solutions Total Regal Rexnord (Dollars in Millions) Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 GA
Slide 20: Adjusted Net Sales
2Q 2022 APPENDIX Three Months Ended Commercial Motion Control ADJUSTED NET SALES Systems Industrial Systems Climate Solutions Solutions Total Regal Rexnord (Dollars in Millions) Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, Jun 30, Jul 3, 2022 2021 2022 2021 2022 2021 2022 2021 2022 20
Slide 21: Adjusted Effective Tax Rate
2Q 2022 APPENDIX ADJUSTED EFFECTIVE TAX RATE Three Months Ended Six Months Ended (Dollars in Millions) Jun 30, Jul 3, Jun 30, Jul 3, 2022 2021 2022 2021 Income before Taxes $ 183.8 $ 106.6 $ 347.1 $ 198.2 Provision for Income Taxes 40.6 20.6 76.8 41.9 Effective Tax Rate 22.1% 19.3% 22.1% 21.1% Incom
Slide 22: Free Cash Flow
2Q 2022 APPENDIX Three Months Six Months FREE CASH FLOW Ended Ended (Dollars in Millions) Jun 30, Jul 3, Jun 30, Jul 3, 2022 2021 2022 2021 Net Cash Provided by Operating Activities $ 110.8 $ 87.1 $ 104.9 $ 136.6 Additions to Property Plant and Equipment (19.2) (13.6) (32.6) (24.3) Free Cash Flow $
Slide 23: Organic Sales Growth
2Q 2022 APPENDIX ORGANIC SALES GROWTH Three Months Ended (Dollars in Millions) Motion Commercial Industrial Climate Control Total Regal Systems Systems Solutions Solutions Rexnord Net Sales Three Months Ended Jun 30, 2022 $ 301.9 $ 154.7 $ 293.5 $ 599.3 $ 1,349.4 Net Sales from Business Acquired - -
Slide 24: Total Gross Debt/EBITDA
2Q 2022 APPENDIX TOTAL GROSS DEBT/EBITDA TOTAL GROSS DEBT/ADJUSTED BANK EBITDA (Dollars in Millions) (Dollars in Millions) LTM Jun 30, LTM Jun 30, 2022 2022 Net Income $ 349.8 Net Income $ 349.8 Plus: Income Taxes 109.6 Plus: Income Taxes 109.6 Plus: Interest Expense 58.7 Plus: Interest Expense 58.7
Slide 25: Total Net Debt/EBITDA
2Q 2022 APPENDIX TOTAL NET DEBT/EBITDA TOTAL NET DEBT/ADJUSTED BANK EBITDA (Dollars in Millions) (Dollars in Millions) LTM Jun 30, LTM Jun 30, 2022 2022 Net Income $ 349.8 Net Income $ 349.8 Plus: Income Taxes 109.6 Plus: Income Taxes 109.6 Plus: Interest Expense 58.7 Plus: Interest Expense 58.7 Les
Slide 26: 2Q 2022 APPENDIX
2Q 2022 APPENDIX Creating a better tomorrow™… 26 ©2022 Regal Rexnord Corporation, Proprietary and Confidential