15 slides from A.o. Smith's earnings presentation, May 5, 2020
Slide 1: First Quarter 2020 Results
First Quarter 2020 Results
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains statements that we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “i
Slide 3: Strength and Stability to Navigate Current Environment
Strength and Stability to Navigate Current Environment Safety of Water heating & Proactive 85% Strong balance employees top water treatment management of replacement of sheet priority essential supply chain for water heaters products business and boilers continuity 3
Slide 4: Focus on Cash and Liquidity
Focus on Cash and Liquidity $125M $850M1 ~ $55M 2020 Share Capital spending Cash repatriated Liquidity China SG&A Repurchase reprioritized and to U.S. savings ($30 suspended reduced million of which mid-March was achieved in 2019) 1 As of April 30, 2020 4
Slide 5: Minimal Debt Maturities in Next Twelve Months
Minimal Debt Maturities in Next Twelve Months $ in millions Revolving Credit Facility $250 $230M $200 $150 LT Notes $106M $100 $50 LT Notes $7M $0M $0M $0M $0M $0M $0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Dec 31, Thereafter 2021 March 31, 2020 5
Slide 6: First Quarter Results
First Quarter Results $ in millions 2020 2019 Change % Change Sales $636.9 $748.2 $(111.3) -15% Net Earnings $ 51.7 $ 89.3 $ (37.6) -42% EPS $ 0.32 $ 0.53 $(0.21) -40% 6
Slide 7: First Quarter Sales
First Quarter Sales $ in millions 2020 2019 Change % Change North America $ 532.9 $ 521.8 $ 11.1 2% Rest of World 110.2 232.1 (121.9) -53% Intersegment (6.2) (5.7) (0.5) Total $ 636.9 $ 748.2 $(111.3) -15% 7
Slide 8: First Quarter Earnings (Loss)
First Quarter Earnings (Loss) $ in millions, except percentages 2020 2019 Change % Change North America $127.1 $116.0 $ 11.1 10% Rest of World (42.2) 12.3 (54.5) Total Segment Earnings 84.9 128.3 (43.4) -34% Corporate (15.0) (14.7) (0.3) -2% Interest Expense (2.2) (2.0) (0.2) -10% Pre-tax Earnings 6
Slide 9: Strong Capital Position
Strong Capital Position1 Cash Flow from Operations $ in millions $54M 17.5% $552M $70 $60 $54 Cash provided Debt to Cash balance2 by operations capital ratio $50 $40 $209M ~1.3M $30 $22 $20 Net cash position Stock repurchase; shares totaling ~$57M $10 $0 2020 2019 1 as of March 31, 2020 2 includes c
Slide 10: April 2020 Business Conditions
April 2020 Business Conditions % Q1 YOY Revenue1 sales April Commentary NA Water April 2020 residential order rates off low single digits compared Heaters 70% -2% with Q1 2020; commercial orders down 30 - 35% China2 14% -56% Sequential sell-out improving NA Boilers 7% -3% Commercial condensing backl
Slide 11: North America Business Conditions
North America Business Conditions Manufacturing Supply Chain Flexibility in NA Proactively Managed Residential Replacement Water Heater Volumes NA Boiler Volumes 100,000 90,000 PEAK HOUSING 80,000 2.1M 10,000 Replacement New Construction 70,000 60,000 8,000 50,000 40,000 6,000 30,000 20,000 4,000 10
Slide 12: China Business Conditions
China Business Conditions Weekly China Channel sell out - Units • Three plants operating – Building to order – Operating at lower than normal levels • Supply chain intact • Demand skew to on-line • Right sizing and product cost reduction continue • New product development and R&D continue 0 1st 2nd
Slide 13: 2020 COVID-19 Commentary
2020 COVID-19 Commentary After a hard closure of Great recession NA boiler sales will be India will not achieve the economy, the impacted residential impacted as break-even in 2020 country is slowly volume by 18% construction slows returning to business 13
Slide 14: Compelling Investment Thesis
Compelling Investment Thesis Market share leader Stable/growing U.S. Strength of premium 5 year adjusted EPS Strong balance sheet in major product lines replacement market; brand, distribution, CAGR through 2019 and cash flow to operating leverage manufacturing and = 12.7% support future from increm
Slide 15: A. O. Smith. Innovation has a name.
(X6 Smith. Innovation has a name.