Woodward, Inc. · NASDAQ:WWD

Woodward — Q4 FY2021 Earnings Presentation

24 slides from Woodward's earnings presentation, Nov 18, 2021

  1. Slide 1: Fourth Quarter and Fiscal Year 2021 Results

    Fourth Quarter and Fiscal Year 2021 Results November 18, 2021

  2. Slide 2: Today's Agenda

    Today’s Agenda  Highlights Don Guzzardo  Market Review Tom Gendron  Financial Results & Outlook Mark Hartman  Q&A 2 | © WOODWARD, INC. PROPRIETARY

  3. Slide 3: Cautionary Statement

    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, statements regarding our business and financial outlook for 2022,

  4. Slide 4: Q4 Fiscal Year 2021 Consolidated Results

    Q4 Fiscal Year 2021 Consolidated Results 1 1 4 | © WOODWARD, INC. PROPRIETARY

  5. Slide 5: Fiscal Year 2021 Consolidated Results

    Fiscal Year 2021 Consolidated Results 1 1 1 1 5 | © WOODWARD, INC. PROPRIETARY

  6. Slide 6: Solid Performance

    Solid Performance COVID‐19 and supply chain impacts continue Seeing improvement in most of our markets Strong financial position  Strong cash generation ‐ free cash flow of $427M  Approximately $1.4B of liquidity, combined cash on hand and revolver capacity  Leverage at 1.7x EBITDA1 at end of Q4

  7. Slide 7: Aerospace

    Aerospace Commercial OEM  67% sales increase for the quarter versus prior year period  OEM production rates increasing as domestic passenger traffic nears pre‐COVID levels, while the international traffic recovery lags Commercial aftermarket  23% sales increase for the quarter versus prior year p

  8. Slide 8: Industrial

    Industrial Power generation  Demand for gas turbines increasing on growth in Asia and continuing replacement of coal powered plants  Strong demand for data center back up power Transportation  Marine markets improving on new ship orders and increased utilization  China natural gas truck market s

  9. Slide 9: Aerospace Q4 Fiscal Year 2021 Results

    Aerospace Q4 Fiscal Year 2021 Results Segment net sales  Higher commercial OEM and aftermarket  Defense aftermarket down compared to strong prior year quarter Segment earnings  Higher volumes, predominately commercial OEM 9 | © WOODWARD, INC. PROPRIETARY

  10. Slide 10: Aerospace Fiscal Year 2021 Results

    Aerospace Fiscal Year 2021 Results 10 | © WOODWARD, INC. PROPRIETARY

  11. Slide 11: Industrial Q4 Fiscal Year 2021 Results

    Industrial Q4 Fiscal Year 2021 Results Segment net sales  Lower industrial gas turbine sales  Weakness in China natural gas truck engines  Improvements in marine Industrial segment earnings  Favorable foreign currency exchange rates impact 11 | © WOODWARD, INC. PROPRIETARY

  12. Slide 12: Industrial Fiscal Year 2021 Results

    Industrial Fiscal Year 2021 Results 1 1 1 12 | © WOODWARD, INC. PROPRIETARY

  13. Slide 13: Selected Financial Items

    Selected Financial Items Quarter and Year‐to‐Date Comparatives Q4 FY 21 Q4 FY 20 FY 2021 FY 2020 Gross Margin* 23.5% 23.3% 24.5% 25.7% SG&A Expenses ‐ % of Sales 6.7% 7.7% 8.3% 8.7% R&D Expenses ‐ % of Sales 4.9% 5.1% 5.2% 5.3% Effective Tax Rate 18.2% 16.0% 15.1% 14.7% EBITDA1 (mils) $101 $ 111 $40

  14. Slide 14: Fiscal Year 2022 Outlook

    Fiscal Year 2022 Outlook End markets and supply chain disruptions are anticipated to improve in fiscal year 2022, although the uncertainty and volatility around the pace of recovery is expected to persist. Growth and profitability in both segments could be negatively affected if COVID‐19 and supply

  15. Slide 15: Fiscal Year 2022 Outlook

    Fiscal Year 2022 Outlook Woodward  Revenue between $2.45 and $2.65 billion FY21 to FY22 EPS  Effective tax rate ~21%  Earnings per share between $3.55 and $3.95  ~66 million shares  Free cash flow ~$315M  Free cash flow conversion greater than 100%  Capital expenditures ~$30M higher Aerospace

  16. Slide 16: Appendix

    WW, woopwarD Appendix

  17. Slide 17: Non-U.S. GAAP Measures

    Non‐U.S. GAAP Measures Woodward, Inc. and Subsidiaries 1 RECONCILIATION OF EARNINGS TO ADJUSTED EARNINGS (Unaudited ‐ in thousands, except per share amounts) Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Earnings Earnings Before Income Earnings Per Before Income Earning

  18. Slide 18: Non-U.S. GAAP Measures – (cont.)

    Non‐U.S. GAAP Measures – (cont.) Woodward, Inc. and Subsidiaries 1 RECONCILIATION OF EARNINGS TO ADJUSTED EARNINGS (Unaudited ‐ in thousands, except per share amounts) Year Ended September 30, 2021 Year Ended September 30, 2020 Earnings Earnings Before Income Earnings Per Before Income Earnings Per

  19. Slide 19: Non-U.S. GAAP Measures (cont.)

    Non‐U.S. GAAP Measures (cont.) Woodward, Inc. and Subsidiaries 1 1 RECONCILIATION OF NET EARNINGS TO EBIT AND ADJUSTED EBIT (Unaudited ‐ in thousands) Q4 2021 Q4 2020 YTD 2021 YTD 2020 Net earnings $ 49,905 $ 57,239 $ 208,649 $ 240,395 Income taxes 11,125 10,879 37,150 41,486 Interest expense 8,730

  20. Slide 20: Non-U.S. GAAP Measures (cont.)

    Non‐U.S. GAAP Measures (cont.) Woodward, Inc. and Subsidiaries 1 1 RECONCILIATION OF NET EARNINGS TO EBITDA AND ADJUSTED EBITDA (Unaudited ‐ in thousands) Q4 2021 Q4 2020 YTD 2021 YTD 2020 Net earnings (U.S. GAAP) $ 49,905 $ 57,239 $ 208,649 $ 240,395 Income taxes 11,125 10,879 37,150 41,486 Interes

  21. Slide 21: Non-U.S. GAAP Measures – (cont.)

    Non‐U.S. GAAP Measures – (cont.) Woodward, Inc. and Subsidiaries 1 RECONCILIATION OF INDUSTRIAL SEGMENT NET SALES EXCLUDING RENEWABLE POWER SYSTEMS AND RELATED BUSINESSES (Unaudited ‐ in thousands) Q4 2021 Q4 2020 YTD 2021 YTD 2020 Industrial segment net sales $ 193,385 $ 194,956 $ 841,715 $ 904,702

  22. Slide 22: Non-U.S. GAAP Measures – (cont.)

    Non‐U.S. GAAP Measures – (cont.) Woodward, Inc. and Subsidiaries RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW 1 AND ADJUSTED FREE CASH FLOW (Unaudited ‐ in thousands) YTD 2021 YTD 2020 Cash From Operations $ 464,669 $ 349,491 Payments for property, plant, and equipment (37

  23. Slide 23: Explanation of Non-U.S. GAAP Measures

    Explanation of Non‐U.S. GAAP Measures 1Adjusted and Non‐U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted Industrial segment earnings, adjusted EBIT and EBITDA, adjusted effective tax rate, Industrial segment net sales excluding RPS, Industrial segment earnin

  24. Slide 24: Always Innovating for a Better Future

    ALWAYS INNOVATING FOR A BETTER FUTURE 24 | © WOODWARD, INC. PROPRIETARY

Woodward — Q4 FY2021 Earnings Presentation on 6ix