Chart Industries, Inc. · NYSE:GTLS
Chart Industries — Investor Presentation (June 2023)
51 slides from Chart Industries's investor presentation, Jun 6, 2023
Slide 1: Chart Industries, Inc. Investor Update
Exhibit 99.1 Chart Industries, Inc. Investor Update JUNE 6, 2023
Slide 2: Forward Looking Statements (1/2)
Forward Looking Statements (1/2) CERTAIN STATEMENTS MADE IN THIS INVESTOR PRESENTATION ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING CHART’S BUSINESS PLANS, INCLUDING STATEMENTS REGA
Slide 3: Forward Looking Statements (2/2)
Forward Looking Statements (2/2) THIS PRESENTATION CONTAINS NON-GAAP FINANCIAL INFORMATION, WITH RESPECT TO THE COMPANY’S 2023 AND 2024 FULL YEAR EARNINGS OUTLOOK, THE COMPANY IS NOT ABLE TO PROVIDE A RECONCILIATION OF THE ADJUSTED EBITDA AND ADJUSTED EARNINGS PER DILUTED SHARE OR ADJUSTED FREE CASH
Slide 4: Agenda
Agenda Overview Demand Update Synergy Update Progress on Deleveraging GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 4
Slide 5: Agenda
Agenda Overview Demand Update Synergy Update Progress on Deleveraging GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 5
Slide 6: Today's Key Takeaways
Today’s Key Takeaways • Market demand and operational execution remains on-track • Demand, inclusive of LNG, remains broad-based and strong • Operational execution against targets, including safety, on-time delivery and productivity on-track • Multiple deleveraging activities underway • Balance shee
Slide 7: Executed to Date On-Schedule and to Targets
Executed to Date On-Schedule and to Targets # Action What we said in November 2022 As of May 31, 2023 Status 1 Financing Did not expect to close into the Completed long term financing in Completed bridge and would seek to limit December 2022; Oversubscribed amount of KPS Capital Partners Closed with
Slide 8: Continue to Execute On-Schedule and to Targets
Continue to Execute On-Schedule and to Targets # Action What we said in November 2022 As of May 31, 2023 Status 1 Cost synergies, year 1 $175 million $175 million Additional opportunities for upside and buffer 2 Commercial synergies, $150 million $150 million with customer inbounds Additional opport
Slide 9: Chart and Howden Talent Depth
Chart and Howden Talent Depth Global Commercial & Global Executive Team Finance & Accounting Engineering Combination of key Chart and Howden talent (APAC, Europe, S. 50%-50% Chart & Howden Comprised of both Howden and Africa, Middle East Presidents personnel; two Howden legacy, Chart personnel with
Slide 10: Agenda
Agenda Overview Demand Update Synergy Update Progress on Deleveraging GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 10
Slide 11: Chart End Market Trends
Chart End Market Trends # End Market Recent Activity Trend 1 Aftermarket, • Penetration of Howden and Chart installed base plus competitors’ installed base service, repair • Increasing demand for site services (with localized response time) and LTSA supporting growth in parts orders • More brownfiel
Slide 12: Growth Acceleration in H2 2023
Growth Acceleration in H2 2023 • Six months of Howden EBITDA and FCF in H2 2023 vs. Three months and 10 days in H1 2023 • Cost Synergies ramp in H2 vs H1, on track for $175 million of annualized cost synergies first 12- months of ownership • Price/ Cost tailwind (In line with Q1 2023 commentary) • S
Slide 13: Agreements / MOUs / Partnerships Expanded
36 Agreements / MOUs / Partnerships Expanded Category Q1 2023 Total # of partnerships expanded # of new or expanded Total # of MOUs/partnerships New MOUs to both Chart & Howden as partnerships to both Chart & new and expanded YTD 2023 of April 27, 2023 Howden (April 27, 2023 to June 30, 2023) Multip
Slide 14: Q2 2023 QTD Demand Continues to be Broad-Based
Q2 2023 QTD Demand Continues to be Broad-Based (Examples of orders booked QTD as of May 31, 2023) Energy / LNG ORY) Industrial Example Synergy Orders FPSO for ssLNG ~$9.5M Gasum 5-year service $5.4M Lifecycle service agreement $4.2M Air pre-heaters $3.3M Earthly Labs biogas $2.9M Hydrogen compressor
Slide 15: Agenda
Agenda Overview Demand Update Synergy Update Progress on Deleveraging GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 15
Slide 16: Original Cost and Commercial Synergy Targets
Original Cost and Commercial Synergy Targets • Additional cost synergy opportunities identified Original Expected Annualized Cost Synergies • Footprint consolidation – numerous additional offices and other sites resulting in identified $25M+ in additional potential synergies, exceeding our initial t
Slide 17: Synergy Achievement (March 17, 2023 to May 31, 2023)
Synergy Achievement (March 17, 2023 to May 31, 2023) # Category Description Synergy orders Annualized Original (Revenue) cost savings annualized achieved to achieved to year-one date date target $ millions $ millions $ millions 1 Cost Sourcing $28.1 $70 2 Cost Optimization and organization 45.5 70 3
Slide 18: Commercial and Cost Synergy Case Study: Hydrogen
Commercial and Cost Synergy Case Study: Hydrogen Chart’s hydrogen liquefaction With Howden, Chart now can Chart’s hydrogen liquefaction customer has a customer that is provide hydrogen compression customer has liquefier on order going to do gaseous hydrogen to the gaseous refueling with Chart in 202
Slide 19: Aftermarket, service, repair synergies
Aftermarket, service, repair synergies Service Centers– proximity to customers & install base Uncovered Products Field Service Support – Americas + Global Covered Customers & Products Sales network for all products Customers Engaged Meaningful opportunity and customer demand for Retrofit opportuniti
Slide 20: Aftermarket, Service and Repair Double-Digit Growth and Example Synergy Wins
Aftermarket, Service and Repair Double-Digit Growth and Example Synergy Wins Howden 2022 full year aftermarket, service and repair gross orders increased 32% (14% organic) compared to 2021 Chart wins the ~$4.2 million, 5 A Chart customer in Europe year service agreement in UK Howden’s field service
Slide 21: Agenda
Agenda Overview Demand Update Synergy Update Progress on Deleveraging GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 21
Slide 22: Net Leverage Profile
Net Leverage Profile (1) Debt Covenant: Net Debt/ LTM Adjusted EBITDA § Q1 2023 net leverage of 4.08X, ahead of 4.25X 6.0X forecast from November 2022 inclusive of PFC settlement payment compete in March 2023 (~$75 million) 4.5X § Reiterate our financial policy that until we are 4.08X within our tar
Slide 23: Cash and Balance Sheet Activities
Cash and Balance Sheet Activities 1. Action completed totaling approximately $70 million in additional capacity and over $2.26 million in cost savings a) Bank fronted surety bond program = capacity, fee savings and no negative ratings views b) Letter of credit capacity outside of RCF (non-debt) in I
Slide 24: Performance Drivers
Performance Drivers Sales Growth Driven By: Margin Expansion Drive By: Deleveraging Driven By: • Full solution offerings for all • Increased full solutions mix • Operational free cash flow molecules and applications • Increased aftermarket, • EBITDA growth • Energy transition activities service and
Slide 25: Appendix
APPENDIX
Slide 26: Agenda
Agenda Synergy Details About Chart and Howden 2023 and 2024 Outlook ESG GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 26
Slide 27: Agenda
Agenda Synergy Details About Chart and Howden 2023 and 2024 Outlook ESG GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 27
Slide 28: Cost Synergy Targets & Achievements (1/6)
Cost Synergy Targets & Achievements Since Acquiring Howden (from March 17, 2023 to May 31, 2023) (1/6) # Category Description Status Total Achieved Total Achieved Total Achieved to Date (as of from April 28 to to Date (as of April 27, 2023) May 31, 2023 May 31, 2023) 1 Sourcing Total year 1 annualiz
Slide 29: Cost Synergy Targets & Achievements (2/6)
Cost Synergy Targets & Achievements Since Acquiring Howden (from March 17, 2023 to May 31, 2023) (2/6) # Category Description Status Total Achieved Total Achieved Total Achieved to Date (as of from April 28 to to Date (as of April 27, 2023) May 31, 2023 May 31, 2023) 15 Sourcing Customer allowed sup
Slide 30: Cost Synergy Targets & Achievements (3/6)
Cost Synergy Targets & Achievements Since Acquiring Howden (3/5) (from March 17, 2023 to May 31, 2023) (3/6) # Category Description Status Total Achieved to Total Achieved Total Achieved to Date (as of April 27, from April 28 to Date (as of May 2023) May 31, 2023 31, 2023) 1 Optimization, Total year
Slide 31: Cost Synergy Targets & Achievements (4/6)
Cost Synergy Targets & Achievements Since Acquiring Howden (4/5) (from March 17, 2023 to May 31, 2023) (4/6) # Category Description Status Total Achieved Total Achieved Total Achieved to to Date (as of from April 28 to Date (as of May April 27, 2023) May 31, 2023 31, 2023) 13 Optimization, Consolida
Slide 32: Cost Synergy Targets & Achievements (5/6)
Cost Synergy Targets & Achievements Since Acquiring Howden (4/5) (from March 17, 2023 to May 31, 2023) (5/6) # Category Description Status Total Achieved Total Achieved Total Achieved to to Date (as of from April 28 to Date (as of May April 27, 2023) May 31, 2023 31, 2023) 27 Optimization, Eliminate
Slide 33: Cost Synergy Targets & Achievements (6/6)
Cost Synergy Targets & Achievements Since Acquiring Howden (from March 17, 2023 to May 31, 2023) (6/6) # Category Description Status Total Achieved to Total Achieved Total Achieved to All figures are annualized millions $ Date (as of April from April 28 to Date (as of May 27, 2023) May 31, 2023 31,
Slide 34: Commercial Synergies Targets & Achievements (1/3)
Commercial Synergies Targets & Achievements Since Acquiring Howden (from March 17, 2023 to May 31, 2023) (1/3) # Synergy Description Status Total Total Total Achieved to Achieved Achieved to Date (as of from April 28 Date (as of April 27, to May 31, May 31, 2023) 2023) 2023 1 Total year 1 commercial
Slide 35: Commercial Synergies Targets & Achievements (2/3)
Commercial Synergies Targets & Achievements Since Acquiring Howden (from March 17, 2023 to May 31, 2023) (2/3) # Synergy Description Status Total Total Total Achieved to Achieved Achieved to Date (as of from April Date (as of April 27, 28 to May May 31, 2023) 2023) 31, 2023 11 Will include Howden co
Slide 36: Commercial Synergies Targets & Achievements (3/3)
Commercial Synergies Targets & Achievements Since Acquiring Howden (from March 17, 2023 to May 31, 2023) (3/3) # Synergy Description Status Total Total Total Achieved to Achieved Achieved to Date (as of from April Date (as of April 27, 28 to May May 31, 2023) 2023) 31, 2023 21 China air preheater wi
Slide 37: Agenda
Agenda Synergy Details About Chart and Howden 2023 and 2024 Outlook ESG GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 37
Slide 38: Chart's Competitive Advantage
Chart’s Competitive Advantage Solution vs. Equipment Domain Expertise/ New Products/R&D Flexible Manufacturing Our People Engineered solution In addition to R&D Multiple locations can across stationary and In Hydrogen, Howden has dollars, Chart is funding produce equipment, rotating equipment for 10
Slide 39: Combined Solutions Across the Nexus of Clean
Combined Solutions Across the Nexus of Clean™ Chart Process Technologies Clean Solution End Market Wholly-Owned Minority Ownership § Hydrogen § BAHX§ Valves / Vaporizers§ Fans § Helium § ACHX§ Expanders§ Compressors § LNG Clean § Bulk & Microbulk§ Liquefiers§ Blowers § Biogas § Fans§ Cold Boxes§ Hea
Slide 40: Expanding Exposure to Additional Markets
Expanding Exposure to Additional Markets Industrial Over the Molecules Energy CCUS Water Nuclear Gas Road by Rail Recovery Energy & Tunnel & Hydrogen Space Lasers Biomass Helium Chemical Metro Food & Marine Critical LNG Biofuels Metal Mining Beverage Systems Care GTLS: GAS TO LIQUID SYSTEMS® 40 Howd
Slide 41: Chart Product Portfolio
Chart Product Portfolio GTLS: GAS TO LIQUID SYSTEMS® 41
Slide 42: Howden Product Portfolio
Howden Product Portfolio Steam Turbines Compressors Blowers & Fans Rotary Heaters Centrifugal Screw Diaphragm Turbo Blowers Air Preheater Single-Stage Fans Reciprocating Centrifugal Rotary Blowers Cooling Fans Gas-Gas Heater Multi-Stage Software & Digital Uptime VentSim™ Design GTLS: GAS TO LIQUID S
Slide 43: Chart's Customer Base of Industry Leaders
Chart’s Customer Base of Industry Leaders • Chart’s top ten customers typically represent greater than 30% of annual sales • In 2021 and 2022, Chart sold to 729 new customers globally GTLS: GAS TO LIQUID SYSTEMS® 43
Slide 44: Howden's Diverse Customer Base of Industry Leaders
Howden’s Diverse Customer Base of Industry Leaders • Howden has no customer with more than 4% concentration and top ten are typically less than 15% of revenue therefore reducing Chart’s customer concentration through the combination • Howden has strong relationships with industry leaders in global m
Slide 45: Segmentation
Segmentation One Chart Global Commercial Team One Chart Global Engineering Team One Chart Global Products – Operations – Aftermarket Heat Transfer Systems Specialty Products Repair, Service & Leasing Cryo Tank Solutions Chart New Build Products Chart New Build Products Chart Aftermarket Chart New Bu
Slide 46: Complementary Exposure to Specialty Markets
Complementary Exposure to Specialty Markets Approx Fct Mkt Growth Market What is in this category Growth Drivers Revenue Mix opportunity § Penetration of existing installed base § Digital Uptime deployment • Field service Aftermarket, repair, and § Field service increasing with new builds and • Remo
Slide 47: Agenda
Agenda Synergy Details About Chart and Howden 2023 and 2024 Outlook ESG GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 47
Slide 48: 2023 Consolidated Chart Industries Outlook
2023 Consolidated Chart Industries Outlook Guidance Metrics as of April 28, 2023 Guidance Metrics as of April 28, $ millions except per share amounts 2023 Revenue $3,660 - $3,800 (2) Adjusted EBITDA $780 - $810 Cost Synergies in EBITDA $60+ (3,4) Adjusted Free cash flow $300 - $350 Cash available fo
Slide 49: Pro Forma Adjusted EBITDA 2023 and 2024
Pro Forma Adjusted EBITDA 2023 and 2024 Combined Chart + Howden Guidance Metrics as of April 28, 2023 • Revenue growth led by energy transition markets and backlog conversion • Implied organic volume leverage of ~30% • Favorable mix driven by energy transition verticals • Cost synergies embedded in
Slide 50: Agenda
Agenda Synergy Details About Chart and Howden 2023 and 2024 Outlook ESG GTLS: GAS TO LIQUID SYSTEMS® © 2023 Chart Industries, Inc. Confidential and Proprietary 50
Slide 51: Setting More Ambitious Emissions Reductions Targets
Setting More Ambitious Emissions Reductions Targets Committed to reducing our greenhouse gas (GHG) intensity 50% by 2030, relative to our 2020 baseline as well as pledging carbon neutrality by 2050 [targets are inclusive of Howden] *Chart has reached and exceeded our goal of reducing GHG intensity b