Greenbrier Companies, Inc. (the) · NYSE:GBX
Greenbrier Companies, Inc. (the) — Stephens Annual Investment Conference 2023
48 slides from Greenbrier Companies, Inc. (the)'s conference presentation, Nov 15, 2023
Slide 1: Stephens Annual Investment Conference November 2023
NYSE: GBX Stephens Annual Investment Conference November 2023
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
Forward Looking Statements & Non-GAAP Financial Measures This presentation and the accompanying oral presentation contain forward-looking statements, including statements that are not purely statements of historical fact. The Greenbrier Companies, Inc. (the “Company,” “we,” “us” or “our”) uses words
Slide 3: An Established Industry Leader
An Established Industry Leader Proven history of delivering strong performance Strategically positioned for growth
Slide 4: Greenbrier is a leading railcar manufacturer and lessor
The Greenbrier Companies is a leading railcar manufacturer and lessor 26,000 LTM railcar ~13,400 Railcars in lease deliveries fleet Revenue visibility Strong financially Recurring revenue(1) $3.8bn available 10% backlog ~$646mn liquidity growth Note: Figures as of August 31, 2023 4 (1) Measured agai
Slide 5: Delivering value to our customers throughout railcar life cycle
Delivering value to our customers throughout railcar life cycle Produce virtually all Greenbrier has a fleet of types of railcars for the ~13,400 (1) railcars in North American, North America, covering Railcar Railcar European and Brazilian numerous car types Manufacturing Leasing markets. which ser
Slide 6: Illustrative example of complete solutions provider to customers
An illustrative example of how we act as a complete solutions provider to our customers Wheels & Incremental Benefits + Parts Maintenance Syndication of railcars to relationship + Services customer Management + Services Purchase of secondary market railcars from customer customer Manufacturing of Ad
Slide 7: Leading position in each geographic end market
Greenbrier has a leading position in each of its geographic end markets North American Backlog Share of Brazilian Production European Wagon Building Capacity 8% 5% 12% 6% 22% 21% 4% 5% 3% 4% 99% 33% 93% 26% 50% 7+ Small 30% 54% 76% 77% 78% builders, 30% Top 5, excl. GBX, 46% 45% 49% 50% 34% 39% Gree
Slide 8: Leadership position across all major product types in North America
Greenbrier has a leadership position across all major product types in North America Description GBX RAIL TRN NSC UTLX Auto Rack Boxcar Refrigerated Flatcar Covered Hopper Gondola Intermodal Open-Top Hopper Tank Car Primary Position Secondary Position 8
Slide 9: Management Services business delivers comprehensive service to lessor customers
Our Management Services business delivers comprehensive service to lessor customers Customers include railroads, industrial shippers, investors, operating lessors Keep asset within repair & maintenance rules and fit for service Manages railcar Manages the per diem administration, rent paid and recei
Slide 10: Maintenance services network provides strategic services to railcar owners
Maintenance services network provides strategic services to railcar owners 19 Production Facilities 491,000 maintenance hours annually 310,000 wheelsets and 90,000 axles annually 42,000 parts/units annually 10
Slide 11: Leasing is integral to the ongoing success of our business
Leasing is integral to the ongoing success of our business Maintain & Originate Manufacture Hold Syndicate Manage Strong origination Greenbrier Railcars reside on Railcars aggregated Long term capabilities and Manufacturing the balance sheet, and sold to third management fees disciplined builds rail
Slide 12: Integrated business model leads to multiple client touchpoints
Our integrated business model leads to multiple client touchpoints & revenue opportunities RAILCAR ORDERS DELIVERIES AFTERMARKET REPAIRS & MAINTENANCE APACITY DIRECT DIRECT C BUYERS BUYERS LONG TERM FLEET LONG TERM Long-lived asset creates cash flows while building equity FEES LESSEES GREENBRIER Sup
Slide 13: Superior lease origination capability is a key enabler
Greenbrier’s superior lease origination capability is a key enabler to our business Manufacturing Order Breakdown(1) 23% 20% 37% 41% 37% 77% 80% 63% 59% 63% 2019 2020 2021 2022 2023 Direct Sales Leased Railcars (1) Represents North American activity through August 31, 2023 13
Slide 14: Solid foundation for continued growth of lease fleet
Solid foundation is in place for the continued growth of Greenbrier’s lease fleet As of August 31, 2023 13,400 4.0 Yrs Lease Types railcars avg. remaining term 2% 24% ~$1.2Bn(1) 124 net book value # of customers 74% 7.5 Yrs 98.3% avg. railcar age fleet utilization Full service Net lease Offlease Com
Slide 15: High-quality portfolio of railcars with diversification
A high-quality portfolio of railcars with diversification across car types and commodities Lease Fleet Railcars by Age (1) Lease Fleet Railcar Types (1) 9.7k 35% 23% 29% 13% 1.7k 1.4k 0.8k 0.3k 0.4k 0.3k 0.1k 0-5 6-10 11-15 16-20 21-25 26-30 31-35 >35 Covered Hopper Box/Flat/Auto Tank OTH/Gondola Ye
Slide 16: Proven history of delivering strong performance
An Established Industry Leader Proven history of delivering strong performance Strategically positioned for growth
Slide 17: Proven history of growing EBITDA through cycles
Proven history of growing EBITDA through cycles; current trough is 2.7x prior trough average Adjusted EBITDA(1) ($ millions) 2.7x higher than $474 ’09 – ’10 trough $434 average EBITDA $317 $318 $340 $310 $291 $254 $231 $161 $163 $145 $129 $90 $112 $113 $103 $76 $64 2005 2006 2007 2008 2009 2010 2011
Slide 18: Railcar backlog provides strong visibility into capacity requirements
Railcar backlog has historically provided strong visibility into capacity requirements Greenbrier New Railcar Backlog $3.8 $3.5 $3.2 $3.3 $2.8 $2.7 $2.8 $2.4 2016 2017 2018 2019 2020 2021 2022 2023 Backlog Value ($ billions) Units in Backlog 27,500 28,600 27,400 30,300 24,600 26,600 29,500 30,900 Ba
Slide 19: Demonstrated track record of generating significant margin dollars
Demonstrated track record of generating significant margin dollars Consolidated Revenue ($ millions) Consolidated Margin ($ millions) $3,944 $441 $366 $353 $3,034 $2,978 $2,792 $306 $232 $1,748 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Consolidated Revenue 10-year Average Consolidated Margin
Slide 20: Leasing & Management Services financial performance
Leasing & Management Services financial performance reflect consistently improving results Segment Margin Segment Margin % $124 68% 69% 66% $105 55% $92 $86 31% $49 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 20
Slide 21: Actions to improve performance of maintenance services
Actions we have undertaken to improve performance of maintenance services ? Rationalizing network capacity to eliminate Maintenance Services Margin % underperformers? Standardizing operating processes? Investing in training and workforce 10% development? Investing in locations to minimize 7% 7% down
Slide 22: Strategically positioned for growth
An Established Industry Leader Proven history of delivering strong performance Strategically positioned for growth
Slide 23: Strategic Initiatives
Strategic Initiatives 1 2 3 4 Capitalize on Continued Balanced Growth of healthy market manufacturing approach to recurring demand excellence capital allocation revenue 23
Slide 24: Railcar demand forecast is conservative
Railcar demand forecast is conservative North American Railcar Deliveries 44,385 40,735 38,350 37,750 36,125 33,417 32,475 29,280 2020 2021 2022 2023F 2024F 2025F 2026F 2027F Tanks Covered Hoppers Other Source: FTR, RSI, November 2023 24
Slide 25: Business strategy aligns with evolving railcar ownership
Our business strategy aligns well with the evolving nature of railcar ownership 25% 16% 47% 57% 19% 17% 9% 10% (2012) (2022) (2012) (2022) (2012) (2022) (2012) (2022) RAILROADS LESSORS SHIPPERS TTX POOL • Overall ownership continues • Shift from RR and shipper- • Shipper ownership share • Overall ma
Slide 26: Strong demand from Europe due to aging fleet
Strong demand from Europe due to aging fleet and requirements to meet Green Deal targets European Fleet Age vs NA 1,600,000 678,000 > 30 years 22% 38% 20—30 years 21% 23% < 20 years 57% 39% NA Europe Estimated Annual Freight Wagon Demand (# of wagons) 22,000 Estimated 2023 deliveries 10,000 12,000 R
Slide 27: Capacity rationalization creating $20 million annual savings
Achieved capacity rationalization creating $20 million in annual savings on an ongoing basis We took steps to optimize our manufacturing footprint. Ongoing annual • Adjusted production footprint and capacity savings of ~ $20 million optimization for more stable demand environment • Continue to evalu
Slide 28: Cost optimization leveraging vertical integration from ARI acquisition
Cost optimization leverage the vertical integration gained through the ARI acquisition We are leveraging our vertical integration…. Optimizations • Making vs buying components will save create $50—$55 costs and help us control our supply chains million of annual • Initially focused in Mexico savings
Slide 29: Disciplined approach to capital allocation
Disciplined approach to capital allocation • Preserve strong liquidity position Maintain Strong 1 • Structure debt facilities to align with business Balance Sheet • Reduce non-leasing debt • Investing in our long-term lease fleet to increase recurring Drive Through revenue and smooth cyclicality 2 C
Slide 30: Strong liquidity supported through syndications and leased railcar sales
Strong liquidity supported through syndications and leased railcar sales Fleet Proceeds & Syndication Liquidity ($ millions) $703 $666 $653 $448 $404 $208 2018 2019 2020 2021 2022 2023 Syndication Fleet Proceeds Total Liquidity ($ millions) $920 $835 $86 $188 $690 $646 $641 $147 $311 $364 $834 $647
Slide 31: No significant near-term debt maturities
No significant near-term debt maturities & ~85% of debt is fixed at an average rate of 3.7% $374 $284 $244 $219 $140 $48 2023 2024 2025 2026 2027 2028 2029 2024 Convert. Note Leasing Warehouse GBX Term Loan Leasing Term Loan 2028 Convert. Note ABS Notes (1) Represents remaining principal balance at
Slide 32: Recourse debt is expected to decrease over next several years
Recourse debt is expected to decrease over the next several years Recourse vs. Non-Recourse Debt Leasing Fleet Debt & Leverage(1) $976 $1,000 78% $941 $780 $847 $671 $333 46% $336 $587 $338 $268 $307 $197 $195 $198 $347 $310 $307 $217 $209 $200 $313 $203 $293 $323 $322 $319 $316 $205 $147 $119 $140
Slide 33: Long Term Financial Targets presented at April 2023 Investor Day
Long Term Financial Targets presented at Greenbrier’s April 2023 Investor Day Recurring Aggregate/ Adjusted Return on Revenue Consolidated Margins Invested Capital (ROIC)(1) FY26 Goal FY26 Goal FY26 Goal Achievement to date 11.2% Starting Point Achievement to date FY23 Starting Point $125 Starting P
Slide 34: Appendix Slides
APPENDIX SLIDES
Slide 35: Driven by our values and commitments to stakeholders
We are driven by our values and commitments we have made to our stakeholders 2023 ESG Report highlights: • Advances ESG strategy which is built on a five-pillar foundation based on 2021’s materiality assessment • Focuses on Safety & Quality, People, Environmental Sustainability, Governance & Ethics
Slide 36: 2023 ESG report highlights
2023 ESG report highlights Environmental Governance & Safety & Quality People Communities Sustainability Ethics Introduced Scope 2 greenhouse gas One railcar (GHG) emissions manufacturing reduction pilot Invested over $1 facility and eight Eight Employee project at Greenbrier Disclosed further Milli
Slide 37: We strive to be the standard setter in the freight transportation industry
We strive to be the standard setter in the freight transportation industry 37
Slide 38: Human Capital Management integrates with broader objectives
Greenbrier’s Human Capital Management integrates with our broader objectives Safety Incident 1.09 Rate 100% DART Rate .95 Employee Resource Groups 72% 95% Participation Rate of DEI Training at U.S. Employee Engagement 7 Production Sites Survey Completion Rate * Source: Association of American Railro
Slide 39: Policy advocacy to protect & promote growth of freight rail
Policy advocacy to protect & promote model growth of freight rail Regulatory Agencies, Trade Associations & Coalitions AAR Interchange Agreement are the “rules of the railroad.” Both regulator and trade association. AAR 25 AAR Committees on rail safety: wheels, braking systems equipment engineering.
Slide 40: Income Statement Highlights
Income Statement Highlights Revenue ($ millions) Adjusted EBITDA ($ millions)(1) Adjusted Diluted EPS(1) $1,122.0 $1,038.1 $1,017.4 $0.99 $1.02 $950.7 $97.9 $96.9 $96.8 $0.92 $88.8 $766.5 $0.60 $48.7 $0.05 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Third consecutive q
Slide 41: Key Operational Metrics
Key Operational Metrics Backlog(1) Deliveries(1) Syndicated Deliveries 2,200 30,900 7,600 29,500 7,000 28,300 6,600 25,900 5,800 23,400 4,800 1,300 900 800 300 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Backlog includes highest quarterly new railcar orders in years of
Slide 42: Balance Sheet & Cash Flow Trends
Balance Sheet & Cash Flow Trends Net Capex & Invest. in (2) Operating Cash Flow Net Funded Debt Unconsolidated Affiliates(1) $178.0 $127.9 $1,349.3 $1,277.6 $1,298.2 $1,345.3 $159.1 $97.6 $70.0 $105.2 $1,043.8 $565.2 $62.2 $69.6 $43.0 $780.1 4Q22 1Q23 2Q23 3Q23 4Q23 ($255.5) 4Q22 1Q23 2Q23 3Q23 4Q23
Slide 43: Annual Adjusted EBITDA Reconciliation
Annual Adjusted EBITDA Reconciliation Reconciliation of Net Earnings (loss) to Adjusted EBITDA (In millions) Year Ending August 31, 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net earnings (loss) $29.8 $39.0 $18.5 $14.2 ($57.9) $8.3 $8.4 $61.2 ($5.4
Slide 44: Quarterly Adjusted EBITDA Reconciliation
Quarterly Adjusted EBITDA Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (Loss) to Adjusted EBITDA (In millions, unaudited) Quarter Ending Aug. 31, Nov. 30, Feb. 28, May. 31, Aug. 31, 2022 2022 2023 2023 2023 Net earnings (loss) $29.4 ($17.3) $36.8 $26.7 $29.4 Interest and for
Slide 45: Quarterly Adjusted Diluted EPS Reconciliation
Quarterly Adjusted Diluted EPS Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (Loss) Attributable to Greenbrier to Adjusted Net Earnings Attributable to Greenbrier (In millions, except per share amounts, unaudited) Quarter Ending Aug. 31, Nov. 30, Feb. 28, May. 31, Aug. 31, 20
Slide 46: Adjusted Return on Invested Capital Calculation
Adjusted Return on Invested Capital Calculation Supplemental Disclosure Calculation of Adjusted Return on Invested Capital (ROIC) (In millions, unaudited) Year Ended Aug. 31, 2023 Earnings from operations $176.4 Earnings from unconsolidated affiliates 9.2 Asset impairment, disposal and exit related
Slide 47: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain financial measures that were not prepared in accordance with generally accepted accounting principles (GAAP) because we believe they help investors understand our performance. Adjusted EBITDA, Adjusted diluted earnings per share (EPS) an
Slide 48: Stephens Annual Investment Conference November 2023
NYSE: GBX Stephens Annual Investment Conference November 2023
Greenbrier Companies — Stephens Annual Investment Conference 2023 on 6ix