Slide 1: Earnings Presentation Q2 2024
UL SOLUTIONS INC. Earnings Presentation Q2 2024 July 31, 2024 © 2024 UL LLC. All Rights Reserved.
Slide 2: Forward looking statements
Forward looking statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, about UL Solutions' (the "Company") financial results and estimates and business prospects that involve substantial risks and unc
Slide 3: Recent updates highlight our focus on megatrends
Recent updates highlight our focus on megatrends Batterieingenieure Korea Automotive and TesTneT Acquisition Battery Testing Center Acquisition (May 2024) (June 2024) (July 2024) Augmented our global battery testing Announced the extension of our Strengthened our position in clean- footprint with th
Slide 4: Q2 2024 Revenue +8.4% organic
Q2 2024 Revenue +8.4% organic1 $ in millions $5 $747 $19 $730 $34 ($11) ($6) $689 Q2 2023 Industrial Consumer S&A Q2 2024 FX1 Acquisition 1 Q2 2024 Organic 1 Organic 1 Organic 1 Organic 1 1 Refer to Organic, FX and Acquisition definitions in Appendix. 4
Slide 5: Q2 Adjusted EBITDA performance
Q2 Adjusted EBITDA1 performance +11.6% $ in millions % Adjusted EBITDA Margin1 $58 $182 $173 $155 ($31) ($3) ($6) 22.5%1 23.7%1 Q2 2023 Organic 2 Organic 2 Q2 2024 FX 2 Acquisition 2 Q2 2024 Revenue Expenses Organic 2 1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. Refer to the A
Slide 6: Q2 Adjusted Net Income performance +5.6%
Q2 Adjusted Net Income1 performance +5.6% $ in millions % Adjusted Net Income Margin1 $58 $89 ($35) $94 ($5) ($13) 12.9%1 12.9%1 Q2 2023 Organic 3 Organic 3 Interest Other2 Q2 2024 Revenue Expenses 1 Adjusted Net Income and Adjusted Net Income margin are non-GAAP financial measures. Refer to the App
Slide 7: Industrial
Industrial $ in millions Q2 2024 results Industrial revenue • 7.5% Revenue Growth (+11.6% Organic) +7.5% – Ongoing certification services and certification $314 testing growth across the entire segment including $292 pricing – Continued strength in industrial electrical product, renewable energy and
Slide 8: Consumer
Consumer $ in millions Q2 2024 results Consumer revenue • 4.2% Revenue Growth (+6.1% Organic) +4.2% $322 – Strength in EMC (electromagnetic compatibility) testing for automotive and consumer electronics $309 – Growth in HVAC end-market driven by regulatory tailwinds Q2 2023 Q2 2024 • Adjusted EBITDA
Slide 9: Software and Advisory
Software and Advisory $ in millions Q2 2024 results Software & Advisory revenue • 6.8% Revenue Growth (+5.7% Organic) +6.8% $94 – Benefited from greater demand for software and $88 sustainability advisory services – ULTRUS™ June release incorporated additional sustainability products Q2 2023 Q2 2024
Slide 10: LTM Cash Flow
LTM Cash Flow LTM Cash Flow Operating Cash Flow % in millions Capital Expenditures Free Cash Flow1 • Generated Free Cash Flow1 of $276M $491 for the last twelve months ended June 30, $431 2024, an increase of $45M (+19.5%) vs the last twelve months ended June 30, 2023 $276 1 • YTD Free Cash Flow ben
Slide 11: Full-year 2024 outlook
• Reiterating mid-single digit constant currency, organic1 revenue growth • Second half constant currency, organic1 revenue growth also expected to be in the mid-single digit range Full-year • Reiterating Adjusted EBITDA margin2 improvement 2024 outlook • Capital expenditures expected to be 7.5 to 8
Slide 12: Summary
Continued momentum from megatrends was supported by outstanding execution - All operating segments and geographies contributed to growth - Improvement in Adjusted EBITDA margins1 driven primarily by Summary revenue acceleration - Expanded our industry-leading capabilities through growth capex invest
Slide 13: Appendix
Appendix 13
Slide 14: Components of revenue change
Components of revenue change Three Months Ended June 30, 2024 (in millions) Organic1 Acquisition2 FX3 Total Organic % Change Total % Change Revenue change Industrial $ 34 $ (7) $ (5) $ 22 11.6 % 7.5 % Consumer 19 — (6) 13 6.1 % 4.2 % Software and Advisory 5 1 — 6 5.7 % 6.8 % Total $ 58 $ (6) $ (11)
Slide 15: Components of revenue change
Components of revenue change Six Months Ended June 30, 2024 (in millions) Organic1 Acquisition2 FX3 Total Organic % Change Total % Change Revenue change Industrial $ 61 $ (6) $ (8) $ 47 10.9 % 8.4 % Consumer 35 (1) (10) 24 6.0 % 4.1 % Software and Advisory 9 2 — 11 5.2 % 6.4 % Total $ 105 $ (5) $ (1
Slide 16: Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measure)
Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measure)1 2 Three Months Ended Six Months Ended June 30, June 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Net income $ 106 $ 99 $ 166 $ 157 Depreciation and amortization expense 41 38 82 74 Interest expense 13 8 28 16 Other inco
Slide 17: Adjusted EBITDA and margin (non-GAAP) by segment
Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measure)1 2 by segment Three Months Ended Six Months Ended June 30, June 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Industrial Segment operating income $ 85 $ 82 $ 160 $ 154 Depreciation and amortization expense 10 9 21 17 Stoc
Slide 18: Adjusted Net Income and margin (non-GAAP measure)
Adjusted Net Income and Adjusted Net Income margin (non-GAAP measure)1 2 Three Months Ended Six Months Ended June 30, June 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Net income $ 106 $ 99 $ 166 $ 157 Other income, net (21) (11) (18) (16) Stock-based compensation 6 — 6 — Restructu
Slide 19: Adjusted Diluted Earnings Per Share (non-GAAP measure)
Adjusted Diluted Earnings Per Share (non-GAAP measure)1 Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Diluted earnings per share2 $ 0.50 $ 0.47 $ 0.78 $ 0.75 Other income, net (0.11) (0.06) (0.09) (0.08) Stock-based compensation 0.03 — 0.03 — Tax effect of adjustments3 0.
Slide 20: Free Cash Flow (non-GAAP measure)
Free Cash Flow (non-GAAP measure)1 Six Months Ended LTM2 June 30, June 30, (in millions, unless otherwise stated) 2024 2023 2024 2023 Net cash provided by operating activities $ 244 $ 220 491 $ 431 Capital expenditures (113) (113) (215) (200) Free Cash Flow1 $ 131 $ 107 $ 276 $ 231 Revenue $ 1,400 $