Columbus Mckinnon Corporation · NASDAQ:CMCO
Columbus Mckinnon — R.W. Baird Global Industrial Conference 2021
32 slides from Columbus Mckinnon's conference presentation, Nov 9, 2021
Slide 1: R.W. Baird Global Industrial Conference
R.W. Baird Global Industrial Conference November 9, 2021 1 David J. Wilson President and Chief Executive Officer Gregory P. Rustowicz Senior Vice President Finance and Chief Financial Officer
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement These slides, and the accompanying oral discussion (together, this “presentation”), contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements concerning: future
Slide 3: Intelligent Motion Solutions for Material Handling
3 Intelligent Motion Solutions for Material Handling (1) Market data as of 11/4/2021 (Source: S&P Capital IQ); Financial data represents TTM ended September 30, 2021 (2) Product mix data represents quarter ended September 30, 2021 Columbus McKinnon (Nasdaq: CMCO) Financial & Market Data(1) Transform
Slide 4: Blueprint for Growth 2.0
4 Blueprint for Growth 2.0 Business System and Core Growth Framework Transform CMCO Strategy evolves Columbus McKinnon into a high value, intelligent motion enterprise
Slide 5: Columbus McKinnon Business System (CMBS) enables top-tier performance and scalability
5 Columbus McKinnon Business System (CMBS) enables top-tier performance and scalability Columbus McKinnon Business System 8. Operations 9. Finance 10. Digitization 6. Commercial / Selling 7. Product Development 1. People & Values 2. Strategic Planning 3. Marketing 4. Product Management 5. M&A Core C
Slide 6: CMBS framework provides repeatable, sustainable enterprise-wide processes
6 CMBS framework provides repeatable, sustainable enterprise-wide processes CMBS Cascading Tiers Playbook for Standard Work and Processes Level 1 Strategic Framework (4) Level 3 Key Processes (65) Level 4 Sub-Processes (270) • Commercial / Selling • Customer Experience • Commercial 80/20 • Selling P
Slide 7: Our Core Growth Framework
7 Our Core Growth Framework Providing a clear path to organic and strategic growth initiatives Rethink current addressable markets and target further strategic expansion through innovative approaches Improve vertical market, channel and geographic access, expand technology and product offerings Take
Slide 8: Evolving underlying portfolio to serve more attractive, high growth markets
8 Evolving underlying portfolio to serve more attractive, high growth markets Business Model Evolution Growth Strategy Substantially Advances Underlying Portfolio Revenue Growth Rate EBITDA Margin CMCO Q2 FY22 With Conveying Solutions Platform Crane Solutions 46% Industrial Products 42% Engineered P
Slide 9: Global leader in intelligent motion solutions for material handling
9 Global leader in intelligent motion solutions for material handling Columbus McKinnon Legacy Solutions Lifting, Linear Motion and Automation Solutions Standard Hoist & Rigging Products: #1 U.S. market position in hoists Lifting capacity from 1/8 ton to ~140 tons Reliable, high-quality products Eng
Slide 10: Conveying Solutions Advances Intelligent Motion Strategy
Conveying Solutions Advances Intelligent Motion Strategy Developing Leading Platform for Growth Scalable, high-growth platform to advance our Intelligent Motion Strategy 10 Specialty conveying provides growth platform: ~$4B TAM growing at 6% to 8% CAGR Higher margin profile Strong secular growth dri
Slide 11: Acquiring Garvey Corporation
11 Leading automation solutions company concentrated in F&B and pharma Acquiring Garvey Corporation Leader in Accumulation Technology Complements Dorner’s Conveying Solutions Provides unique, patented technologies in the design, application, manufacturing and integration of accumulation systems Indu
Slide 12: Secular Growth Markets Provide Strong Tailwinds
12 Strong performance and market share gains within attractive verticals Secular Growth Markets Provide Strong Tailwinds Single piece picking, robotics integration to automate picking and sorting functions ~4% of sales on a pro-forma basis* Custom designed sanitary and easy to clean conveyors engine
Slide 13: Driving Organic Growth with New Products
13 Improved customer experience, safety and productivity at the core of new product development Driving Organic Growth with New Products Delivering Innovation • Unique, beltless zone control for pallet and tray handling • Ideal for accumulation and automation assembly applications • Improved facilit
Slide 14: Driving Innovation Through Automation
14 Creating competitive advantages with pre-engineered automation solutions Driving Innovation Through Automation Intelli-Crane™ Solutions INTELLI-LIFT™ AUTO DETECTIONINTELLI-PROTECT™ SYSTEM INTELLI-CONNECT™+ MOBILE APP • Visible and audible warnings when off- center pick is detected • Auto-correcti
Slide 15: Strong Track Record of Creating Value Through M&A
January 2017 Acquisition of STAHL CraneSystems from Konecranes for ~$218M strengthens leading global position in lifting solutions Transforming Columbus McKinnon into a top-tier, higher growth, higher margin enterprise 15 Strong Track Record of Creating Value Through M&A Programmatic M&A M&A Pipelin
Slide 16: Driving towards $1 billion in annualized revenue
16 Driving towards $1 billion in annualized revenue Strong Demand Driving Recovery NET SALES $157.8 $166.5 $186.2 $213.5 $223.6 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 (1)Guidance provided on October 28, 2021. Equates to ~$838 million of Q3 FY22 TTM revenue. $809.2 $649.6 FY20 FY21 ($ in millions) S
Slide 17: Converting Revenue to Earnings
17 Advancing strategy to drive profitable growth and realize long-term objectives Converting Revenue to Earnings ADJUSTED EBITDA MARGIN Adjusted EBITDA margin continues to recover from FY21 13.4% 10.9% 13.9% 16.0% 16.1% Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 • 100 basis points contribution from Dor
Slide 18: More opportunities to pursue CMBS to Deliver Margin Expansion
Created more than $41 million of incremental OI beginning in FY19… More opportunities to pursue CMBS to Deliver Margin Expansion 80/20 Critical Business Tool Product SKUs Down to ~26,500 from ~50,000 in 2019 Goal: 26,000 Purchased parts Reduced by 33% to ~270,000 Simplify the Business: Eliminate ble
Slide 19: Cash Flow
$67.2 $97.4 $86.6 $53.6 88% 127% 229% 85% FY19 FY20 FY21 Q2 FY22 TTM 19 Free Cash Flow(2) Cash Flow • Strong cash generation even as inventory builds to address supply chain constraints • Q2 FY22 YTD includes cash outflow of $13.5 million for acquisition deal costs related to Dorner acquisition • FY
Slide 20: Capital Structure
20 Expect to quickly de-lever to target net leverage ratio of 2.0x Capital Structure (1)Pro-forma net debt leverage ratio is on a financial covenant basis defined as Net Debt / TTM Adjusted EBITDA including Dorner and Garvey TTM EBITDA and cost synergies CAPITALIZATION Sept. 30, 2021 Pro-forma with
Slide 21: Orders and Backlog
21 Orders and Backlog Demand remains strong across breadth of end markets (1)Long-term backlog is expected to ship beyond three months ($ in millions) Continued Strength in Orders Record backlog of $255.6 million • 38% year-over-year increase driven by short cycle demand, project business and acquis
Slide 22: Q3 FY22 Outlook and Perspective
22 Executing on Blueprint for Growth 2.0 strategy to drive value creation Q3 FY22 Outlook and Perspective (1) Revenue guidance provided October 28, 2021 Q3 FY2022 outlook • Expect Q3 FY22 net sales of approximately $215 million(1) Addressing supply chain and staffing challenges • Expect to stay ahea
Slide 23: Key Takeaways
23 Key Takeaways Transforming to a Top-tier, Secular Growth, Intelligent Motion Solutions Enterprise Growth strategy is underpinned by CMBS enabling scalability and operational excellence EVOLVED STRATEGY BLUEPRINT FOR GROWTH 2.0 DEFINES GROWTH FRAMEWORK COLUMBUS MCKINNON BUSINESS SYSTEM – CMBS – EN
Slide 24: R.W. Baird Global Industrial Conference
R.W. Baird Global Industrial Conference November 9, 2021 24
Slide 25: Supplemental Information
Supplemental Information 25
Slide 26: Advancing ESG priorities aligned with materiality assessment
26 Advancing ESG priorities aligned with materiality assessment Launched Inaugural CSR Report Strategic Initiatives • Five-year plan – based on baselines, gap analysis & target setting • Tightly aligned with business strategy • Prioritized by impact, risk assessment and opportunity for value • Metri
Slide 27: Capacity Utilization
27 U.S. Capacity Utilization Eurozone Capacity Utilization Industrial Capacity Utilization Source: The Federal Reserve Board Source: European Commission 65% 67% 69% 71% 73% 75% 77% 79% 81% 83% 85% 82.9% Q3 2021 60% 65% 70% 75% 80% Manufacturing Total 75.9% (Manufacturing) & 75.2% (Total) September 2
Slide 28: ISM Production Index
28 ISM Production Index Source: Institute of Supply Chain Management 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 59.3% October 2021
Slide 29: Adjusted Net Income Reconciliation
29 Adjusted Net Income Reconciliation (1) Applies normalized tax rate of 22% to GAAP pre-tax income and non-GAAP adjustments above, which are each pre-tax. Adjusted net income and diluted EPS are defined as net income and diluted EPS as reported, adjusted for certain items and at a normalized tax ra
Slide 30: Adjusted EBITDA Reconciliation
30 Adjusted EBITDA Reconciliation Adjusted EBITDA is defined as net income before interest expense, income taxes, depreciation, amortization, and other adjustments. Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles in the United States, commonly
Slide 31: Free Cash Flow & Free Cash Flow Conversion Reconciliation
31 Free Cash Flow & Free Cash Flow Conversion Reconciliation Free cash flow is defined as cash from operations minus capital expenditures. Free cash flow conversion is defined as free cash flow divided by adjusted net income including amortization. Free cash flow and free cash flow conversion are no
Slide 32: Global organization with production facilities in the Americas, EMEA, and APAC
32 Global organization with production facilities in the Americas, EMEA, and APAC Global Enterprise Kunzelsau, DE Hoist Milwaukee, WI Power Control Conveying Solutions Wadesboro, NC Hoist Damascus, VA Hoist Charlotte, NC Actuator Mexico Hoists Conveying Solutions Lexington, TN Chain Chattanooga, TN
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