Lennox International, Inc. · NYSE:LII
Lennox International — Q4 2025 Earnings Presentation
21 slides from Lennox International's earnings presentation, Jan 28, 2026
Slide 1: Fourth Quarter 2025 Earnings Release
INTEGRITY | RESPECT | EXCELLENCE FOURTH QUARTER 2025 EARNINGS RELEASE JANUARY 28, 2026
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES The statements in this presentation that are not historical statements, including statements regarding the 2026 full-year outlook and expected consolidated and segment financial results, as well as financial targets for future years, are forwa
Slide 3: 2025 Financial Highlights
2025 FINANCIAL HIGHLIGHTS RECORD FULL YEAR MARGINS: RESILIENT PROFITS IN CHALLENGING MARKETS Q4 REVENUE SEGMENT OPERATING PROFIT MARGIN CASH FLOW 2025 Adjusted Earnings Per Share* $1.2B 17.7% $406M (11%) YoY (110 bps) YoY +$74M YoY Q4 Full Year Full Year $4.45 $23.16 REVENUE SEGMENT OPERATING (22%)
Slide 4: Headwinds Easing, Opportunities Emerging
HEADWINDS EASING, OPPORTUNITIES EMERGING 2025 Impact 2026 Outlook Destocking post regulatory transition 1H 2H R454B cannister shortage impact Home Comfort Lower consumer confidence Solutions Residential new construction Ductless and parts growth 2025 Impact 2026 Outlook Commercial HVAC industry soft
Slide 5: Fueling Growth Acceleration
FUELING GROWTH ACCELERATION Investments made, expected returns in 2026+ Planned investment with attractive returns Front End Manufacturing & Customer Training Development and Excellence Distribution and Engagement Testing Sales excellence, Revenue Ops Commercial, Heat Pump, A2L 5+ New training cente
Slide 6: Q4 2025 Lennox Results
Q4 2025 LENNOX RESULTS REVENUE SEGMENT PROFIT (US$ MILLIONS) (US$ MILLIONS) (11%) ($41M) or (16%) $1,345 +3% $1,195 Adjusted (22%) to $4.45 +9% $253 +$84 EPS* $21 $212 (23%) ($31) ROS 18.8% ($115) ROS 17.7% Broad residential market weakness influenced profit, though indicators point to gradual 2024
Slide 7: Q4 2025 Home Comfort Solutions
Q4 2025 HOME COMFORT SOLUTIONS REVENUE SEGMENT PROFIT (US$ MILLIONS) (US$ MILLIONS) $887 $700 $193 $137 Volume: Distributor and contractor destocking, weak new construction ROS 21.8% ROS 19.6% and more repairs vs. replace Mix/Price: New R-454B product 2024 2025 2024 2025 Product Cost: Materials infl
Slide 8: Q4 2025 Building Climate Solutions
Q4 2025 BUILDING CLIMATE SOLUTIONS REVENUE SEGMENT PROFIT (US$ MILLIONS) (US$ MILLIONS) $495 $458 $115 $104 Volume: Share gains during challenging light commercial end ROS ROS markets 22.6% 23.1% Product Cost: Materials inflation and factory absorption, partially 2024 2025 2024 2025 offset by commod
Slide 9: Full Year 2025 Lennox Results
FULL YEAR 2025 LENNOX RESULTS REVENUE SEGMENT PROFIT* (US$ MILLIONS) (US$ MILLIONS) +$16M or +2% (3%) $5,341 +9% + 1% $5,195 Adjusted (13%) $1,042 +$356 $1,058 EPS* +2% to $23.16 ($80) ($5) ($255) ROS 19.5% ROS 20.4% Solid results in a challenging market and an industry refrigerant transition 2024 V
Slide 10: Cash Flow and Capital Deployment
CASH FLOW AND CAPITAL DEPLOYMENT 500 406 120% CASH CONVERSION 332 Cash Conversion Temporarily Constrained 95% 400 100% 81% 300 80% 97% 62% 78% 60% • Inventory expected to normalize by Q2 2026 200 OPERATING CASH FLOW 100 40% • Strong collections and payments helped offset (US$ MILLIONS) 20% 0 0% TTM
Slide 11: 2026 Financial Guidance
2026 FINANCIAL GUIDANCE GROWTH OTHER GUIDANCE ITEMS Revenue Segment Profit Inflation ~+2.5% ∆ YoY Incremental* Investments +$35M Volume (LSD) (~35%) COST ∆ YoY M&A Amortization +$15M Price | Mix +MSD ~75% Productivity ($75M) Interest $65M M&A +MSD ~30% Tax Rate ~20% Share Count ~35M Total LII 6% - 7
Slide 12: On Track to Deliver on 2022 Commitments
ON TRACK TO DELIVER ON 2022 COMMITMENTS SELF-HELP TRANSFORMATION Recover & Invest Growth Acceleration Expansion PLAN 2022 - 2024 2025 - 2026 2026-2030 $5.4 - $6.0B REVENUE Updated 2026 set to Long-Term targets deliver on all 19-21% ROS will be shared at Long-Term the 2026 Lennox targets Investor Day
Slide 13: Attractive Investment Opportunity
ATTRACTIVE INVESTMENT OPPORTUNITY Execution Consistency and Disciplined Capital Deployment Advanced Technology Resilient Margin Solutions with Business Focused on Direct-to-Dealer Network Sustainable HVACR Talent & Culture Driven by Growth End Core Values, Guiding Markets with Strong Behaviors and P
Slide 14: Thank You!
INTEGRITY | RESPECT | EXCELLENCE THANK YOU!
Slide 15: LIFO to FIFO – Accounting Conversion
LIFO TO FIFO – ACCOUNTING CONVERSION Reduced Eliminates detailed inventory layer tracking and simplifies 01 Complexity accounting and audit processes. Price and Cost FIFO aligns pricing gains with cost increases more effectively, as price 02 Enhanced Matching improvements typically lag behind LIFO c
Slide 16: LIFO to FIFO Adjusted Operating Profit & Net Income
LIFO TO FIFO ADJUSTED OPERATING PROFIT & NET INCOME For the Three Months Ended December 31, For the Years Ended December 31, 2024 2024 2024 As Reported Effect of Change As Adjusted As Reported Effect of Change As Adjusted Net sales $ 1,345.0 $ - $ 1,345.0 $ 5,341.3 $ - $ 5,341.3 Cost of goods sold 8
Slide 17: LIFO to FIFO Adjusted Segment Profit
LIFO TO FIFO ADJUSTED SEGMENT PROFIT 2024 Three Months Ended December 31, 2024 Twelve Months Ended December 31, 2024 Effect of Effect of As Reported Change As Adjusted As Reported Change As Adjusted Segment Profit (1) Home Comfort Solutions $192.6 $0.8 $193.4 $759.7 $0.8 $760.5 Building Climate Solu
Slide 18: LIFO to FIFO Adjusted Balance Sheet
LIFO TO FIFO ADJUSTED BALANCE SHEET 2024 The effect of the changes made to our Consolidated Balance Sheet was as follows (in millions): As of December 31, 2024 Effect of As Reported Change As Adjusted Inventories, net 704.8 148.2 853.0 Total assets 3,471.8 148.2 3,620.0 Deferred income taxes (Other
Slide 19: Revenue and Segment Profit
REVENUE AND SEGMENT PROFIT Change Year-over-Year Change Year-over-Year Net Sales Q4 2025 Q4 2024 Volume Mix/Price Other Total FY 2025 FY 2024 Volume Mix/Price Other Total Home Comfort Solutions $ 700 $ 887 (32%) 9% 2% (21%) $ 3,343 $ 3,577 (17%) 10% 0% (7%) Building Climate Solutions 495 458 (7%) 8%
Slide 20: Net Debt to Adjusted EBITDA
NET DEBT TO ADJUSTED EBITDA For the Twelve Months Ended December 31, (Unaudited) 2025 2024 Income before taxes, a GAAP Measure $ 996.8 $ 999.4 Restructuring charges, before tax 6.8 - Interest expense, net 40.9 38.7 Pension settlements, before tax 0.4 0.4 Other expense (income), net before tax 3.4 1.
Slide 21: Free Cash Flow & FCF Conversion
FREE CASH FLOW & FCF CONVERSION For the Three Months Ended December 31, For the Twelve Months Ended (Unaudited) (Unaudited) 2025 2024 4Q 2024 1Q 2025 2Q 2025 3Q 2025 4Q 2025 Net Cash provided by operating activities, a GAAP measure $ 405.9 $ 332.4 $ 945.7 $ 932.7 $ 835.5 $ 684.1 $ 757.6 Purchases of