Woodward, Inc. · NASDAQ:WWD

Woodward — Q1 2023 Earnings Presentation

22 slides from Woodward's earnings presentation, Jan 30, 2023

1. Slide 1: Fiscal Year 2023 First Quarter Results

   FISCAL YEAR 2023 FIRST QUARTER RESULTS January 30, 2023

2. Slide 2: Q1 Fiscal Year 2023 Agenda

   Q1 FISCAL YEAR 2023 AGENDA STRATEGIES & INTRODUCTION MARKET REVIEW FINANCIAL RESULTS & OUTLOOK Dan Provaznik Chip Blankenship Mark Hartman ________ ________ ________ 2 | © WOODWARD, INC. PROPRIETARY

3. Slide 3: Cautionary Statement

   F O R Y O U R I N F O R MAT ION CAUTIONARY 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 revenue growth in fiscal

4. Slide 4: Q1 Fiscal Year 2023 Summary

   Q1 FISCAL YEAR 2023 SUMMARY STRONG END MARKET DEMAND EARNINGS NEGATIVELY IMPACTED BY SALES NEGATIVELY IMPACTED BY • NET INFLATIONARY PRESSURES ON • $95M OF GLOBAL SUPPLY CHAIN AND LABOR MATERIAL AND LABOR COSTS DISRUPTIONS • GLOBAL SUPPLY CHAIN DISRUPTIONS • UNFAVORABLE FOREIGN CURRENCY EXCHANGE • I

5. Slide 5: Q1 Fiscal Year 2023 Consolidated Results

   Q1 FISCAL YEAR 2023 CONSOLIDATED RESULTS 619 36 27 26 Adjusted1 542 Adjusted1 $0.56 Adjusted1 $0.49 $0.47 ↑14% 30 30 (19) Net Sales (mil $) Earnings per Share (EPS) Net Earnings (mil $) Free Cash Flow (mil $) (Fiscal Year-to Date) 5 | © WOODWARD, INC. FY22 FY23 PROPRIETARY

6. Slide 6: Aerospace Overview

   W woopwarD AEROSPACE OVERVIEW

7. Slide 7: Aerospace Markets

   AEROSPACE MARKETS COMMERCIAL OEM  32% sales increase over the prior year quarter  Higher OEM build rates COMMERCIAL AFTERMARKET  47% sales increase over the prior year quarter  Increased passenger traffic – both domestic and international  Increased fleet utilization 7 | © WOODWARD, INC. PROPRI

8. Slide 8: Aerospace Markets

   AEROSPACE MARKETS DEFENSE OEM  15% sales decrease over the prior year quarter  Decline in guided weapons  Other markets were stable DEFENSE AFTERMARKET  Flat from the prior year quarter  Impacted by global supply chain and labor disruptions 8 | © WOODWARD, INC. PROPRIETARY

9. Slide 9: Aerospace Q1 Fiscal Year 2023

   AEROSPACE Q1 FISCAL YEAR 2023 396 336 55 15.2% 51 14.0% ↑18% Segment Sales (mil $) Segment Earnings (mil $) Segment Margin 9 | © WOODWARD, INC. FY22 FY23 PROPRIETARY

10. Slide 10: Industrial Overview

    W woopwarD INDUSTRIAL OVERVIEW

11. Slide 11: Industrial Markets

    INDUSTRIAL MARKETS POWER GENERATION  Strong growth in Asia driving demand for industrial turbomachinery  Global aftermarket activity increasing  Consistent demand for backup power at data centers TRANSPORTATION  Global marine market healthy on increased ship build rates and higher utilization 

12. Slide 12: Industrial Q1 Fiscal Year 2023

    INDUSTRIAL Q1 FISCAL YEAR 2023 223 11.5% 24 205 9% 11 5.1% Segment Sales (mil $) Segment Earnings (mil $) Segment Margin 12 | © WOODWARD, INC. FY22 FY23 PROPRIETARY

13. Slide 13: Selected Financial Results

    SELECTED FINANCIAL RESULTS Quarter and Year-to-Date Comparatives Q1 FY 22 Q1 FY 23 Gross Margin * 22.6% 20.4% SG&A Expenses - % of Sales 11.5% 10.2% R&D Expenses - % of Sales 4.7% 4.6% Effective Tax Rate 19.7% 6.7% EBITDA1 (mils) $ 76 $ 72 Adjusted EBITDA1 (mils) $ 84 $ 72 Cash from Operations (mils

14. Slide 14: Capital Deployment to Stockholders

    CAPITAL DEPLOYMENT TO STOCKHOLDERS $37M RETURNED TO SHAREHOLDERS Q1 FY23 $11M Dividends $26M Share Repurchases RETURN TO SHAREHOLDERS DIVIDENDS SHARE REPURCHASES Long-term commitment to  $11M in Q1 fiscal 2023  $26M of shares repurchased in Q1 fiscal return a minimum 50% of 2023 net earnings to 

15. Slide 15: Fiscal Year 2023 Outlook

    FISCAL YEAR 2023 OUTLOOK WOODWARD AEROSPACE  Revenue between $2.60 and $2.75B  Revenue increase between 14% and 19%  Effective tax rate1 ~19%  Margin increase between 150 to 200 basis points  EPS between $3.15 and $3.60 based on ~61 million shares INDUSTRIAL  ~$10M increase in annual interest

16. Slide 16: Fiscal Year 2023 Outlook: Modeling Reminders

    FISCAL YEAR 2023 OUTLOOK A FEW REMINDERS TO ASSIST WITH YOUR MODELING 1. As a result of our strategic investments and mitigation actions, we anticipate the supply chain and labor disruptions will begin to subside in the second half of the fiscal year. 2. We expect the full year price realization to

17. Slide 17: Appendix

    W woopwarD APPENDIX

18. Slide 18: Non-U.S. GAAP Reconciliations

    A P P EN D IX 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 December 31, 2022 Before Income Net of Income Per Share, Net of Tax Tax Income Tax Earnings (U.S. GAAP

19. Slide 19: Non-U.S. GAAP Reconciliations

    A P P EN D IX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries RECONCILIATION OF NET EARNINGS TO EBIT1 AND ADJUSTED EBIT1 (Unaudited - in thousands) Three-Months Ended December 31, 2022 2021 Net earnings (U.S. GAAP) $ 29,606 $ 30,305 Income taxes 2,143 7,441 Interest expense 11,142 8,30

20. Slide 20: Non-U.S. GAAP Reconciliations

    A P P EN D IX NON-U.S. GAAP RECONCILIATIONS Woodward, Inc. and Subsidiaries RECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED NONSEGMENT EXPENSES1 (Unaudited - in thousands) Three-Months Ended December 31, 2022 2021 Nonsegment expenses (U.S. GAAP) $ 24,311 $ 29,365 Non-recurring matter unrelated to

21. Slide 21: Non-U.S. GAAP Measures

    A P P EN D IX NON-U.S. GAAP MEASURES 1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, plant, and equipment, and intangible assets that are subject to amortization. The use of any of these adjusted EBIT, adjusted EBITDA, adjusted effective tax rate,

22. Slide 22: Always Innovating for a Better Future

    ALWAYS INNOVATING FOR A BETTER FUTURE 22 | © WOODWARD, INC. PROPRIETARY

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