Westinghouse Air Brake Technologies Corporation · NYSE:WAB
Westinghouse Air Brake Technologies — Q4 2021 Earnings Presentation
30 slides from Westinghouse Air Brake Technologies's earnings presentation, Feb 16, 2022
Slide 1: Wabtec 4th Quarter 2021 Financial Results & Company Highlights
Confidential & Proprietary 1 Wabtec 4th Quarter 2021 Financial Results & Company Highlights February 16, 2022
Slide 2: Forward looking statements & non-GAAP financial information
2 Forward looking statements & non-GAAP financial information This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litiga
Slide 3: Today's participants
3 Today’s participants Rafael Santana President & Chief Executive Officer John Olin Executive Vice President & Chief Financial Officer Kristine Kubacki Vice President, Investor Relations PRESENTERS INVESTOR RELATIONS
Slide 4: 4Q 2021 overview
4 4Q 2021 overview SALES ADJUSTED OPERATING MARGIN (2) ADJUSTED EARNINGS PER SHARE(2) CASH FROM OPERATIONS (1) BACKLOG $1.18 GAAP: $1.02 $2.07B 16.1% $314M $22.17B • Sales growth driven by Freight Services & Components … despite ongoing supply chain disruptions • Delivered 210 bps of adj. margin exp
Slide 5: Market outlook
5 0% 5% 10% 15% 20% Kazakhstan Russia China Brazil India 2 0 2 1 V o lu m e s v s 2 0 2 0 Market outlook Average North American Parked Locomotives 2022 Market Assumptions 2021 Global Freight Volumes 2018 2019 2020 2021 YoY North American Rail Carloads (5.9%) (17.7%) (6.4%) 3.2% 5.1% 20.2% (0.1%) (4.
Slide 6: Recent wins
6 FLXDRIVE DEMAND ADVANCING THE FUTURE OF CLEAN RAIL EUROPE RAIL JOINT UNDERTAKING FOUNDING MEMBER FREIGHT TRANSIT Recent wins
Slide 7: 4Q 2021 financial summary
7 4Q 2021 financial summary S A L E S 2021 O P E R A T I N G I N C O M E 2021 GAAP E P S 2020 2021 Adj(1)2020 Adj(1) $2.07B $264M $2.02B $283M $334M 14.0% 16.1% I N C R E A S E D S A L E S , M A R G I N S A N D A D J U S T E D E P S D E S P I T E S U P P L Y C H A I N D I S R U P T I O N S A N D I N
Slide 8: 4Q 2021 sales
8 4Q 2021 sales P R O D U C T L I N E 4 Q 2 1 Y O Y F Y 2 1 Y O Y Equipment $377 (12.9%) $1,302 (15.0%) Components $218 11.8% $867 5.9% Services $663 21.2% $2,430 17.5% Digital Electronics $167 1.8% $640 (3.6%) Freight Segment $1,425 6.4% $5,239 3.1% Transit Segment $648 (5.4%) $2,583 4.4% T O T A L
Slide 9: 4Q 2021 consolidated adjusted gross profit
9 4Q 2021 consolidated adjusted gross profit 4 Q ( 2 ) F Y 2 1 ( 3 ) 2 0 2 0 A D J G R O S S P R O F I T (1) $527 $2,182 % of Sales 26.0% 28.9% Volume ↑ ↑ Mix/Pricing ↑↑ ↑ Raw Materials ↓↓ ↓ Currency ↓ ↑ Manufacturing/Synergies/Other ↑ ↑ 2 0 2 1 A D J G R O S S P R O F I T (1) $657 $2,422 % of Sales
Slide 10: 4Q 2021 consolidated adjusted operating income
10 4Q 2021 consolidated adjusted operating income C O N S O L I D A T E D 4 Q (2) F Y 2 1 (3) 2 0 2 0 A D J O P I N C O M E (1) $283 $1,143 % of Sales 14.0% 15.1% Adj Gross Profit 130 240 SG&A (65) (128) Engineering (14) (14) 2 0 2 1 A D J O P I N C O M E (1) $334 $1,241 % of Sales 16.1% 15.9% A D J
Slide 11: 4Q 2021 Freight segment performance
11 4Q 2021 Freight segment performance 2021 4Q214Q202020 $1.43B(2) $1.34B $17.89B $18.50B(2) (1) Adjusted numbers represent non-GAAP financial measures, see Appendix for additional details and reconciliations (2) Foreign exchange rates negatively impacted Freight sales by $2 million; Foreign exchang
Slide 12: 4Q 2021 Transit segment performance
12 4Q 2021 Transit segment performance 2021 4Q214Q202020 $648M(2) $685M $3.70B $3.67B(2) 2021 GAAP 2021 Adj(1)2020 Adj(1) $79M $77M $88M 11.3% 13.6% $57M 2020 GAAP 5.4% Decrease 2.3 pts of Adj Margin Expansion 1.0% Decrease (1) Adjusted numbers represent non-GAAP financial measures, see Appendix for
Slide 13: Resilient business allows for execution on financial priorities
13 Resilient business allows for execution on financial priorities FOCUSED ON CASH CONVERSION(1) FY 2021FY 2020 $0.78B $1.07B Cash from Ops Record cash generation … full-year up 37% YoY Proactively managing working capital Capex of $52M in 4Q … $130M for FY 2021 STRONG FINANCIAL POSITION 4Q214Q20 $3
Slide 14: 2021 overview
14 2021 overview SALES ADJUSTED OPERATING MARGIN (1) ADJUSTED EARNINGS PER SHARE(1) CASH FROM OPERATIONS $4.26 GAAP: $2.96 $7.82B 15.9% $1.07B • Full-year sales growth driven by Services, Components & recovery in Transit … strong growth in Mods, improving railcar deliveries & partial recovery in Tra
Slide 15: 2022 outlook and guidance
15 2022 outlook and guidance $8.3B to $8.6B R E V E N U E S $4.65 to $5.05 A D J U S T E D E P S >90% C A S H C O N V E R S I O N (1) B R O A D - B A S E D R E C O V E R Y A C R O S S P O R T F O L I O E Q U I P M E N T Significantly higher deliveries of international locos & favorable mining fundam
Slide 16: What you've heard
16 What you’ve heard Advancing our long-term strategies… leading decarbonization and utilization of rail … creating significant value for our customers Leveraging significant installed base … resilient business model Strong execution in dynamic cost environment … navigating supply chain disruptions
Slide 17: Save the date
Save the date March 9, 2022 . 8:00 AM ET . Virtual Webcast
Slide 18: Appendix
18 Appendix
Slide 19: Income statement
19 Income statement Appendix A ( 1 of 2) 2021 2020 2021 2020 Net sales 2,073$ 2,024$ 7,822$ 7,556$ Cost of sales (1,421) (1,518) (5,453) (5,419) Gross profit 652 506 2,369 2,137 Gross profit as a % of Net Sales 31.5% 25.0% 30.3% 28.3% Selling, general and administrative expenses (264) (236) (1,030)
Slide 20: Income statement (cont.) - Segment information
20 Appendix A ( 2 of 2) Income statement (cont.) 2021 2020 2021 2020 Segment Information Freight Net Sales 1,425$ 1,339$ 5,239$ 5,082$ Freight Income from Operations 207$ 121$ 717$ 584$ Freight Operating Margin 14.5% 9.0% 13.7% 11.5% Transit Net Sales 648$ 685$ 2,583$ 2,474$ Transit Income from Oper
Slide 21: Balance sheet
21 Balance sheet Appendix B December 31, 2021 December 31, 2020 In millions Cash and cash equivalents 473$ 599$ Receivables, net 1,477 1,412 Inventories 1,689 1,642 Other current assets 193 227 Total current assets 3,832 3,880 Property, plant and equipment, net 1,497 1,601 Goodwill 8,587 8,485 Other
Slide 22: Cash flow
22 Appendix C Cash flow 2021 2020 In millions Operating activities Net income 565 412 Non-cash expense 571 444 Receivables (76) 315 Inventories (41) 181 Accounts Payable 109 (269) Other assets and liabilities (55) (299) Net cash provided by operating activities 1,073 784 Net cash used for investing
Slide 23: EPS and non-GAAP Reconciliation (1 of 2)
23 EPS and non-GAAP Reconciliation Appendix D (1 of 2) Wabtec Corporation Reconciliation of Reported Results to Adjusted Results (in millions) Gross Operating Income from Interest & Noncontrolling Wabtec Net Sales Profit Expenses Operations Other Exp Tax Net Income Interest Net Income EPS Reported R
Slide 24: EPS and non-GAAP Reconciliation (2 of 2)
24 Appendix D (2 of 2) EPS and non-GAAP Reconciliation Wabtec Corporation Reconciliation of Reported Results to Adjusted Results (in millions) Gross Operating Income from Interest & Noncontrolling Wabtec Net Sales Profit Expenses Operations Other Exp Tax Net Income Interest Net Income EPS Reported R
Slide 25: EBITDA reconciliation
25 EBITDA reconciliation Appendix E Wabtec Corporation 2021 Q4 EBITDA Reconciliation (in millions) Reported Income Other Income Depreciation & Restructuring & Adjusted from Operations (Expense) Amortization Transaction Costs EBITDA Consolidated Results $264 $13 $121 $398 ($2) $396 Wabtec Corporation
Slide 26: Sales by product line
26 Sales by product line Appendix F In millions 2021 2020 Freight Segment Equipment 377$ 433$ Components 218 195 Digital Electronics 167 164 Services 663 547 Total Freight Segment 1,425 1,339 Transit Segment Original Equipment Manufacturer 299$ 322$ Aftermarket 349 363 Total Transit Segment 648 685
Slide 27: Segment gross margin reconciliation
27 Segment gross margin reconciliation Appendix G In millions 2021 2020 2021 2020 Freight Segment Reported Gross Profit 454$ 339$ 1,667$ 1,488$ Freight Segment Reported Gross Margin 31.9% 25.3% 31.8% 29.3% Restructuring & Transaction costs 3 14 8 30 Freight Segment Adjusted Gross Profit 457$ 353$ 1,
Slide 28: Segment operating margin reconciliation
28 Segment operating margin reconciliation Appendix H In millions 2021 2020 2021 2020 Freight Segment Reported Income from Operations 207$ 121$ 717$ 584$ Freight Segment Reported Margin 14.5% 9.0% 13.7% 11.5% Restructuring & Transaction costs (7) 32 9 76 Non-cash Amortization expense 67 66 267 262 F
Slide 29: Segment sales reconciliation
29 Segment sales reconciliation Appendix I In millions Freight Transit Consolidated 2020 Net Sales 1,339$ 685$ 2,024$ Acquisitions 61 - 61 Foreign Exchange (2) (15) (17) Organic 27 (22) 5 2021 Net Sales 1,425$ 648$ 2,073$ Change ($) 86 (37) 49 Change (%) 6.4% -5.4% 2.4% Freight Transit Consolidated
Slide 30: Cash conversion reconciliation
30 Cash conversion reconciliation Appendix J Wabtec Corporation 2021 Q4 Cash Conversion Calculation (in millions) Reported Cash from Operations Consolidated Results $314 $193 $123 99% Wabtec Corporation 2021 Q4 YTD Cash Conversion Calculation (in millions) Reported Cash from Operations Consolidated
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