Westinghouse Air Brake Technologies Corporation · NYSE:WAB
Westinghouse Air Brake Technologies — Q1 2024 Earnings Presentation
27 slides from Westinghouse Air Brake Technologies's earnings presentation, Apr 24, 2024
Slide 1: First Quarter 2024 Wabtec Financial Results & Company Highlights
F I R S T Q U AR T E R 2 0 2 4 Wabtec Financial Results & Company Highlights
Slide 2: Forward Looking Statements & Non-GAAP Financial Information
FORWARD LOOKING STATEMENTS & NON-GAAP FINANCIAL INFORMATION This communication contains “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigati
Slide 3: Today's Participants
W A B T E C TODAY’S PARTICIPANTS J O H N O L I N Executive Vice President & Chief Financial Officer R A F A E L S A N T A N A President & Chief Executive Officer K Y R A Y A T E S Vice President, Investor Relations
Slide 4: 1Q 2024 Overview
W A B T E C 4 1Q 2024 OVERVIEW S A L E S $ 2 . 5 0 B Up 13.8% YOY O P E R A T I N G M A R G I N 1 6 . 5 % G A A P 1 9 . 8 % Adjusted E A R N I N G S P E R S H A R E $ 1 . 5 3 G A A P $ 1 . 8 9 Adjusted C A S H F L O W F R O M O P E R A T I O N S ( 1 ) $ 3 3 4 M 1 2 - M O N T H B A C K L O G $ 7 . 7
Slide 5: 2024 Market Expectations
W A B T E C 5 15.7% 4.2% 7.6% 27.1% -3.5% Brazil China India South Africa Kazakhstan2020 2021 2022 2023 2024F 33K 30K 41K 45K 36K 2024 MARKET EXPECTATIONS F R E I G H T NA Carloads +/↔ Active Locomotive Fleet ↔ International Freight Volumes + NA Railcar Deliveries - Mining Commodities ↔ T R A N S I
Slide 6: Executing on Our Value Creation Framework
W A B T E C EXECUTING ON OUR VALUE CREATION FRAMEWORK DRIVERS OF PORTFOLIO GROWTH RECENT WINS Won multi-year order for over $270 million in Africa Mining orders $260 million ... aftermarket continues to be strong Long term parts agreement for $80 million signed with PT KAI Launched next-generation r
Slide 7: Wabtec's Path to Zero Emissions Locomotives
W A B T E C 7 WABTEC’S PATH TO ZERO EMISSIONS LOCOMOTIVES D E V E L O P B E S T - I N - C L A S S Z E R O E M I S S I O N S T E C H N O L O G Y F D L F L E E T E V O F L E E T Wabtec Advantage: Fleet replacement with Tier 4 locomotives & mods improves fuel efficiency by up to 18%. Wabtec locomotives
Slide 8: 1Q 2024 Financial Summary
W A B T E C 8 0 0.5 1 1.5 2 2.5 3 Chart Title 1Q 2024 FINANCIAL SUMMARY 0 100 200 300 400 500 600 Category 1 Chart Title (1) Adjusted numbers represent non-GAAP financial measures. See Appendix for additional details and reconciliations INCREASED SALES, MARGIN EXPANSION AND EPS GROWTH 13.8% INCREASE
Slide 9: 1Q 2024 Sales
W A B T E C 9 1Q 2024 SALES (in millions) P R O D U C T L I N E 1 Q 2 4 Y O Y Equipment $526 30.2% Components $293 13.6% Digital Intelligence $176 (5.9%) Services $829 17.3% Freight Segment $1,824 17.2% Transit Segment $673 5.5% T O T A L S A L E S $ 2 , 4 9 7 1 3 . 8 % 1 Q K E Y D R I V E R S E Q U
Slide 10: 1Q 2024 Consolidated Gross Profit
W A B T E C 10 1Q 2024 CONSOLIDATED GROSS PROFIT ($ in millions) 2 0 2 3 G R O S S P R O F I T $ 6 6 5 $ 6 6 9 % Gross Profit Margin 30.3% 30.5% Volume ↑ ↑ Mix/Pricing ↑ ↑ Raw Materials ↔ ↔ Currency ↔ ↔ Manufacturing/Other ↑ ↑ 2 0 2 4 G R O S S P R O F I T $ 8 1 5 $ 8 2 1 % Gross Profit Margin 32.7%
Slide 11: 1Q 2024 Consolidated Operating Income
W A B T E C 11 1Q 2024 CONSOLIDATED OPERATING INCOME 2 0 2 3 O P I N C O M E $276 $360 % Operating Margin 12.6% 16.4% Gross Profit 150 152 SG&A (18) (20) Engineering 3 3 Amortization 1 - 2 0 2 4 O P I N C O M E $412 $495 % Operating Margin 16.5% 19.8% O P M A R G I N B E N E F I T E D F R O M H I G
Slide 12: 1Q 2024 Freight Segment Performance
W A B T E C 12 0 1 2 3 4 5 6 Chart Title 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 Chart Title 1Q 2024 FREIGHT SEGMENT PERFORMANCE 0 50 100 150 200 250 300 350 400 450 500 Category 1 17.2% INCREASE (17.2% INCREASE EX-CURRENCY) SALES 2 0 2 3 2 0 2 4 2 0 2 3 GAAP 2 0 2 4 GAAP 2 0 2 3 ADJ(1) 2 0 2 4 ADJ(1)
Slide 13: 1Q 2024 Transit Segment Performance
W A B T E C 13 0 0.5 1 1.5 2 2.5 Chart Title 0 100 200 300 400 500 600 700 800 Chart Title 1Q 2024 TRANSIT SEGMENT PERFORMANCE 0 10 20 30 40 50 60 70 80 90 100 Category 1 5.5% INCREASE (4.9% INCREASE EX-CURRENCY) SALES 2 0 2 3 2 0 2 4 2 0 2 3 GAAP 2 0 2 4 GAAP 2 0 2 3 ADJ(1) 2 0 2 4 ADJ(1) $70M 11.0
Slide 14: Resilient Business Allows for Execution on Financial Priorities
W A B T E C 14 RESILIENT BUSINESS ALLOWS FOR EXECUTION ON FINANCIAL PRIORITIES Strong balance sheet and financial position … liquidity of $2.13B FOCUSED ON CASH CONVERSION(1) CASH FROM OPS DISCIPLINED CAPITAL ALLOCATION S T R O N G F I N A N C I A L P E R F O R M A N C E ; I N V E S T I N G F O R G
Slide 15: 2024 Updated Financial Guidance
W A B T E C 15 2024 Updated F inanc ial Guidance ( 1 , 2 ) - Adjusted operating margin up - Favorable productivity/absorption - Benefits of Integration 2.0/Portfolio Optimization - Lower SG&A & Engineering expenses as % of sales g K E Y A S S U M P T I O N S - Tax rate ~25% - Capex ~2% of sales R E
Slide 16: Key Takeaways
W A B T E C 16 KEY TAKEAWAYS (1) Long-term guidance as of March 9, 2022 (on an adjusted earnings basis) Continued momentum across the portfolio and strong order pipeline and backlog, internationally and in North America Positive productivity driven by continuous cost improvement combined with realiz
Slide 17: Appendix A: Income Statement
APPENDIX A ( 1 of 2) 2024 2023 Net sales 2,497$ 2,194$ Cost of sales (1,682) (1,529) Gross profit 815 665 Gross profit as a % of Net Sales 32.7% 30.3% Selling, general and administrative expenses (281) (263) Engineering expenses (48) (51) Amortization expense (74) (75) Total operating expenses (403)
Slide 18: Appendix A: Segment Information and Backlog
2024 2023 Segment Information Freight Net Sales 1,824$ 1,556$ Freight Income from Operations 368$ 226$ Freight Operating Margin 20.2% 14.5% Transit Net Sales 673$ 638$ Transit Income from Operations 74$ 70$ Transit Operating Margin 11.0% 11.0% Backlog Information (Note: 12-month is a sub-set of tota
Slide 19: Appendix B: Balance Sheet
BALANCE SHEET March 31, 2024 December 31, 2023 In millions Cash, cash equivalents and restricted cash 639$ 620$ Receivables, net 1,541 1,684 Inventories, net 2,356 2,284 Other current assets 263 267 Total current assets 4,799 4,855 Property, plant and equipment, net 1,445 1,485 Goodwill 8,730 8,780
Slide 20: Appendix C: Cash Flow
CASH FLOW 2024 2023 In millions Operating activities Net income 277$ 173$ Non-cash expense 126 124 Receivables 121 (51) Inventories (85) (188) Accounts Payable 45 47 Other assets and liabilities (150) (130) Net cash provided by (used for) operating activities 334 (25) Net cash used for investing act
Slide 21: Reconciliation of Reported Results to Adjusted Results
Wabtec Corporation Reconciliation of Reported Results to Adjusted Results (in millions) Gross Operating Income from Interest & Noncontrolling Wabtec Net Sales Profit Expenses Operations Other Exp Tax Net Income Interest Net Income EPS Reported Results 2,497$ 815$ (403)$ 412$ (49)$ (86)$ 277$ (5)$ 27
Slide 22: EPS and Non-GAAP Reconciliation
EPS AND NON-GAAP RECONCILIATION APPENDIX D (2 of 2) Wabtec Corporation Reconciliation of Reported Results to Adjusted Results (in millions) Gross Operating Income from Interest & Noncontrolling Wabtec Net Sales Profit Expenses Operations Other Exp Tax Net Income Interest Net Income EPS Reported Resu
Slide 23: EBITDA Reconciliation
EBITDA RECONCILIATION Wabtec Corporation 2024 Q1 YTD EBITDA Reconciliation (in millions) Reported Income Other Income Depreciation & Restructuring Adjusted from Operations (Expense) Amortization Costs EBITDA Consolidated Results $412 ($2) $122 $532 $8 $540 Wabtec Corporation 2023 Q1 YTD EBITDA Recon
Slide 24: Sales by Product Line
SALES BY PRODUCT LINE In millions 2024 2023 Freight Segment Equipment 526$ 404$ Components 293 258 Digital Intelligence 176 187 Services 829 707 Total Freight Segment 1,824$ 1,556$ Transit Segment Original Equipment Manufacturer 310$ 289$ Aftermarket 363 349 Total Transit Segment 673$ 638$ Three Mon
Slide 25: Segment Gross Margin & Operating Margin Reconciliation
SEGMENT GROSS MARGIN & OPERATING MARGIN RECONCILIATION In millions Gross Profit Income from Operations Gross Profit Income from Operations Freight Segment Reported Results 625$ 368$ 478$ 226$ Freight Segment Reported Margin 34.3% 20.2% 30.7% 14.5% Restructuring and Portfolio Optimization costs 3 3 1
Slide 26: Segment Sales Reconciliation
SEGMENT SALES RECONCILIATION Freight Transit Consolidated 2023 Net Sales 1,556$ 638$ 2,194$ Acquisitions 36 - 36 Foreign Exchange 1 4 5 Organic 231 31 262 2024 Net Sales 1,824$ 673$ 2,497$ Change ($) 268 35 303 Change (%) 17.2% 5.5% 13.8% (UNAUDITED) Three Months Ended March 31, WESTINGHOUSE AIR BRA
Slide 27: Cash Conversion Reconciliation
APPENDIX ICASH CONVERSION RECONCILIATION Wabtec Corporation 2024 Q1 YTD Cash Conversion Calculation (in millions) Reported Cash from Operations Consolidated Results $334 $277 $123 84% Wabtec Corporation 2023 Q1 YTD Cash Conversion Calculation (in millions) Reported Cash from Operations Consolidated
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