Kennametal Inc. · NYSE:KMT

Kennametal — Q2 FY2022 Earnings Presentation

30 slides from Kennametal's earnings presentation, Feb 8, 2022

Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this release may be forward-looking in nature, or “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not rel
Slide 3: Results highlight continuing strong execution and operating leverage
Results highlight continuing strong execution and operating leverage Q2 FY22 Overview & Highlights  Improving end-markets & results from growth initiatives driving strong sales: 11% organic growth vs. (14)% prior year • Segment YoY organic growth rates: Infrastructure 18%, Metal Cutting 7% • Region
Slide 4: Innovation and Commercial Excellence initiatives driving share gain
Innovation and Commercial Excellence initiatives driving share gain Recent Customer Wins Electric Vehicles Aerospace Renewable Energy Process Industries  Our leadership  Continue to win  Share gain  Pelletizing dies for position in EV larger share of continuing in wind large-scale continues to g
Slide 5: Commercial and Operational Excellence driving growth and profitability
Commercial and Operational Excellence driving growth and profitability Consolidated Q2 FY22 Financial Overview Adjusted Reported Change Quarter Ended ($ in millions) from PY Dec 31, 2021 Dec 31, 2020 Dec 31, 2021 Dec 31, 2020 Sales 10% $487 $441 $487 $441 Organic 11% (14)% 11% (14)% FX - 1% - 1% Div
Slide 6: Significant EPS improvement driven by strong operating leverage
Significant EPS improvement driven by strong operating leverage Q2 FY22 Adjusted EPS Bridge $0.40 $0.18 $0.35 $0.00 $0.01 $0.35 ($0.01 ) $0.30 Includes: $0.25 • ~4 cents Simplification/Modernization carryover • Headwind of ~9 cents (~$10M) from prior year $0.20 temporary cost control actions $0.16 $
Slide 7: Metal Cutting Business Segment Q2 FY22
Improved margins driven by Operational Excellence and growth Sales by Geography Sales by End Market Metal Cutting Business Segment AsiaPac 22% Americas 40% Aerospace 9% Energy 8% General Engineering Q2 FY22 Summary 57% EMEA Transportation 38% 26% Q2 FY22 sales $299 million; organic sales up 7% YoY v
Slide 8: Infrastructure Business Segment Q2 FY22
Market recovery, share gain and Operational Excellence driving improved results Sales by Geography Sales by End Market General AsiaPac Infrastructure Business Segment 26% Engineering 36% Energy 28% Q2 FY22 Summary EMEA 17% Americas Earthworks 57% 36% Q2 FY22 sales $188 million; 18% organic sales gro
Slide 9: Strong balance sheet and cash flow generation
Strong balance sheet and cash flow generation Debt Structure & Share Repurchase Program 700 Total Debt Net Debt Debt maturity profile 629 595 595 605 • Two $300M notes mature June 2028 & March 2031 600 • $700M revolver matures June 2023 $ Millions 526 499 490 503 • Covenant ratios well within limits
Slide 10: Q3 FY22 Outlook: YoY growth and strong operating leverage
Q3 FY22 Outlook: YoY growth and strong operating leverage Q3 FY22 Outlook Sales $500M - $520M (up 3% - 7% YoY) Adjusted Operating Income > $55M (up 32% YoY) Adjusted Effective Tax Rate 26% - 28% Free Operating Cash Flow Positive Q3 sales outlook mid-point reflects following assumptions: • Higher tha
Slide 11: FY22 Outlook: Driving strong full-year operating leverage and cash flow
FY22 Outlook: Driving strong full-year operating leverage and cash flow FY22 Full-Year Outlook Prior Year Temporary Cost Actions ~$25M headwind YoY in 1H FY22 only Adjusted Effective Tax Rate 26% - 28% (vs. 23.6% in FY21) Depreciation & Amortization ~$135M (up ~$10M YoY) Capital Spending $110M - $12
Slide 12: Leveraging modernized footprint to gain share and improve margins
Leveraging modernized footprint to gain share and improve margins Looking Ahead: Foundation in place for outperformance Broad improvement in most end-markets supports positive outlook • Higher than normal quarterly sales trends expected to continue in Q3 and Q4, despite market uncertainties • Chip i
Slide 13: Appendix
Appendix ER <cennamerat
Slide 14: Adjusted Segment Results
Adjusted Segment Results Quarter ended ($ in millions) December 31, 2021 December 31, 2020 Metal Cutting Infrastructure Total Metal Cutting Infrastructure Total Sales $299 $188 $487 $283 $158 $441 Organic 7% 18% 11% (14)% (14)% (14)% FX - 1% - 1% 1% 1% Business Days (1)% - (1)% - 1% 1% Divestiture -
Slide 15: Balance Sheet
Balance Sheet ASSETS ($ in millions) December 2021 June 2021 Cash and cash equivalents $102 $154 Accounts receivable, net 272 303 Inventories 533 476 Other current assets 77 72 Total current assets $984 $1,005 Property, plant and equipment, net 1,023 1,055 Goodwill and other intangible assets, net 3
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations The information presented by the Company contains certain non-GAAP financial measures including organic sales decline, constant currency regional sales growth (decline), constant currency end market sales growth (decline), adjusted gross profit and margin; adjusted operating
Slide 17: Non-GAAP Reconciliations (cont'd)
Non-GAAP Reconciliations (cont’d) Constant Currency End Market Sales Growth (Decline) Constant currency end market sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) by end market excluding the impacts of acquisitions

Kennametal — Q2 FY2022 Earnings Presentation on 6ix

Kennametal — Q2 FY2022 Earnings Presentation

Slide 1: FY22 Second Quarter Earnings Call Presentation

Slide 2: Safe Harbor Statement

Slide 3: Results highlight continuing strong execution and operating leverage

Slide 4: Innovation and Commercial Excellence initiatives driving share gain

Slide 5: Commercial and Operational Excellence driving growth and profitability

Slide 6: Significant EPS improvement driven by strong operating leverage

Slide 7: Metal Cutting Business Segment Q2 FY22

Slide 8: Infrastructure Business Segment Q2 FY22

Slide 9: Strong balance sheet and cash flow generation

Slide 10: Q3 FY22 Outlook: YoY growth and strong operating leverage

Slide 11: FY22 Outlook: Driving strong full-year operating leverage and cash flow

Slide 12: Leveraging modernized footprint to gain share and improve margins

Slide 13: Appendix

Slide 14: Adjusted Segment Results

Slide 15: Balance Sheet

Slide 16: Non-GAAP Reconciliations

Slide 17: Non-GAAP Reconciliations (cont'd)

Slide 18: Non-GAAP Reconciliations (cont'd)

Slide 19: Non-GAAP Reconciliations (cont'd)

Slide 20: Non-GAAP Reconciliations (cont'd)

Slide 21: Non-GAAP Reconciliations (cont'd)

Slide 22: Non-GAAP Reconciliations (cont'd)

Slide 23: Non-GAAP Reconciliations (cont'd)

Slide 24: Non-GAAP Reconciliations (cont'd)

Slide 25: Non-GAAP Reconciliations (cont'd)

Slide 26: Non-GAAP Reconciliations (cont'd)

Slide 27: Non-GAAP Reconciliations (cont'd)

Slide 28: Non-GAAP Reconciliations (cont'd)

Slide 29: Non-GAAP Reconciliations (cont'd)

Slide 30: Non-GAAP Reconciliations (cont'd)