Slide 1: Fiscal Year 2023 Second Quarter Results
FISCAL YEAR 2023 SECOND QUARTER RESULTS May 1, 2023
Slide 2: Q2 Fiscal Year 2023 Agenda
Q2 FISCAL YEAR 2023 AGENDA STRATEGIES & INTRODUCTION MARKET REVIEW FINANCIAL RESULTS & OUTLOOK Dan Provaznik Chip Blankenship Mark Hartman ________ ________ ________ 2 | © WOODWARD, INC. PROPRIETARY
Slide 3: Cautionary Statement
FOR YOUR INFORM ATIO N CAUTIONARY STATEMENT Information in this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, our expectations of anticipated year-over-y
Slide 4: Q2 Fiscal Year 2023 Summary
Q2 FISCAL YEAR 2023 SUMMARY STRONG END MARKET DEMAND ADJUSTED EARNINGS 1 IMPROVEMENT DRIVEN BY SALES UP 22% • HIGHER VOLUMES SALES IMPACTED BY • FAVORABLE PRODUCT MIX • ONGOING INDUSTRY-WIDE SUPPLY CHAIN AND • PRICE REALIZATION LABOR DISRUPTIONS • PARTIALLY OFFSET BY INFLATION, HIGHER • UNFAVORABLE
Slide 5: Q2 Fiscal Year 2023 Consolidated Results
Q2 FISCAL YEAR 2023 CONSOLIDATED RESULTS $1.01 Adjusted1 62 718 Adjusted1 $0.74 48 47 $0.72 Adjusted1 587 Adjusted1 ↑22% $0.58 36 27 26 Adjusted1 Adjusted1 Net Sales (mil $) Earnings per Share (EPS) (4) (1) Net Earnings (mil $) Free Cash Flow (mil $) (Fiscal Year-to-Date) 5 | © WOODWARD, INC. FY22 F
Slide 6: Aerospace Overview
W woopwarD AEROSPACE OVERVIEW
Slide 7: Aerospace - Commercial
AEROSPACE - COMMERCIAL COMMERCIAL OEM ▪ 30% sales increase over the prior year quarter ▪ Higher OEM build rates COMMERCIAL AFTERMARKET ▪ 28% sales increase over the prior year quarter ▪ Continuing passenger traffic recovery in all regions - both domestic and international ▪ Increased fleet utilizati
Slide 8: Aerospace - Defense
AEROSPACE - DEFENSE DEFENSE OEM ▪ 10% sales decrease over the prior year quarter ▪ Decline in guided weapons ▪ Other programs are stable at elevated levels DEFENSE AFTERMARKET ▪ 16% sales increase over the prior year quarter ▪ Increased upgrade activity 8 | © WOODWARD, INC. PROPRIETARY
Slide 9: Aerospace Q2 Fiscal Year 2023
AEROSPACE Q2 FISCAL YEAR 2023 73 437 60 16.8% 373 16.0% ↑17% Segment Sales (mil $) Segment Earnings (mil $) Segment Margin 9 | © WOODWARD, INC. FY22 FY23 PROPRIETARY
Slide 10: Industrial Overview
W woopwarD INDUSTRIAL OVERVIEW
Slide 11: Industrial Markets
INDUSTRIAL MARKETS POWER GENERATION ▪ Demand remains strong driven by LNG growth and expansion ▪ Global aftermarket activity increasing ▪ Continued demand for backup power at data centers TRANSPORTATION ▪ Global marine healthy on increased ship utilization, normalizing freight rates, and continued s
Slide 12: Industrial Q2 Fiscal Year 2023
INDUSTRIAL Q2 FISCAL YEAR 2023 281 38 13.4% 214 8.1% 31% 17 Segment Sales (mil $) Segment Earnings (mil $) Segment Margin 12 | © WOODWARD, INC. FY22 FY23 PROPRIETARY
Slide 13: Select Financial Results
SELECT FINANCIAL RESULTS Quarter and Year-to-Date Comparatives Q2 FY 22 Q2 FY 23 YTD FY 22 YTD FY 23 Gross Margin * 22.7% 22.1% 22.7% 21.3% SG&A Expenses - % of Sales 7.5% 10.5% 9.4% 10.4% R&D Expenses - % of Sales 5.5% 5.3% 5.1% 5.0% Effective Tax Rate 11.4% 11.8% 14.8% 9.5% EBITDA1 (mils) $ 92 $ 8
Slide 14: Capital Deployment to Stockholders
CAPITAL DEPLOYMENT TO STOCKHOLDERS $51M RETURNED TO SHAREHOLDERS IN FY23 YTD $25M $26M Share Dividends Repurchases RETURN TO DIVIDENDS SHARE REPURCHASES SHAREHOLDERS ▪ $25M in fiscal 2023 YTD ▪ $26M of shares repurchased in fiscal 2023 Long-term commitment to YTD return a minimum 50% of net earnings
Slide 15: Fiscal Year 2023 Revised Outlook
FISCAL YEAR 2023 REVISED OUTLOOK We continue to expect year-over-year improvements in the second half of fiscal 2023. Due to our better-than-expected results experienced in the second quarter, as well as the anticipated lower income tax rate for the full year, we are raising certain aspects of our f
Slide 16: Appendix
W woopwarD APPENDIX
Slide 17: Non-U.S. GAAP Reconciliations
APPENDIX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries 1 RECONCILIATION OF EARNINGS TO ADJUSTED EARNINGS (Unaudited - in thousands, except per share amounts) Three-Months Ended Three-Months Ended March 31, 2023 March 31, 2022 Per Share, Net of Per Share, Net of Before Income Tax Net
Slide 18: Non-U.S. GAAP Reconciliations
APPENDIX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries 1 1 RECONCILIATION OF NET EARNINGS TO EBIT AND ADJUSTED EBIT (Unaudited - in thousands) Three-Months Ended March 31, Six-Months Ended March 31, 2023 2022 2023 2022 Net earnings (U.S. GAAP) $ 35,511 $ 47,906 $ 65,117 $ 78,211 Inco
Slide 19: Non-U.S. GAAP Reconciliations
APPENDIX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries 1 RECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED NONSEGMENT EXPENSES (Unaudited - in thousands) Three-Months Ended March 31, Six-Months Ended March 31, 2023 2022 2023 2022 Nonsegment expenses (U.S. GAAP) $ 58,307 $ 15,250 $ 82
Slide 20: Non-U.S. GAAP Measures
APPENDIX NON-U.S. GAAP MEASURES 1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, and ad
Slide 21: Always Innovating for a Better Future
ALWAYS INNOVATING FOR A BETTER FUTURE 21 | © WOODWARD, INC. PROPRIETARY