Modine Manufacturing Company · NYSE:MOD
Modine Manufacturing — Q3 2024 Earnings Presentation
18 slides from Modine Manufacturing's earnings presentation, Jan 31, 2024
Slide 1: Third Quarter Fiscal 2024
Third Quarter Fiscal 2024 January 31, 2024
Slide 2: Presenters
NEIL BRINKER President and Chief Executive Officer MICK LUCARELI Executive Vice President and Chief Financial Officer KATHY POWERS Vice President, Treasurer, and Investor Relations
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” “projects,” and other similar “forward-looking” stat
Slide 4: Opening Comments
Opening Comments ▪ Successful quarter highlighted by margin expansion and earnings growth ▪ Improving our earnings profile by shifting to faster-growing and higher margin businesses ▪ We remain in early stages of our 80/20 implementation and transformation ▪ Focusing on operational excellence, addin
Slide 5: Climate Solutions
Climate Solutions ▪ Data Center business remains strong, while certain markets for heat transfer products remain soft ▪ Announced the purchase of IP and select assets of TMGcore, single- and two- phase liquid immersion cooling specialist ▪ Expands global data center product offering to support needs
Slide 6: Performance Technologies
Performance Technologies ▪ Large margin increases driven by 80/20 initiatives, with a heavy focus on commercial improvements and productivity enhancements ▪ EV Systems announced an important partnership with Bosch Rexroth, a recognized leader in drive and control technologies for the off-highway mar
Slide 7: Climate Solutions
Climate Solutions 34% Data Centers (In millions) Net Sales ▪ Growth driven by sales to hyperscale and colocation $248.6 customers $242.5 2% HVAC&R ▪ Increase in power industrial coolers and IAQ product sales along with a relatively flat Heating market -21% Heat Transfer Products ▪ Lower demand acros
Slide 8: Performance Technologies
Performance Technologies 27% Advanced Solutions (In millions) Net Sales ▪ Growth driven by commercial and specialty vehicle $323.0 customers, along with higher coatings sales $317.8 -4% Liquid-Cooled Applications ▪ Primarily driven by German divestitures and automotive market softness 2% Air-Cooled
Slide 9: Financial Review
Financial Review (In millions) Net Sales Adjusted EBITDA & (In millions) Q3 FY24 Q3 FY23 EBITDA Margin* $73.9 Net Sales $561.4 $560.0 $560.0 $561.4 $53.3 Gross Profit 127.3 97.6 13.2% % of net sales 22.7% 17.4% 9.5% SG&A expenses 68.0 58.0 % of net sales 12.1% 10.3% Q3 FY23 Q3 FY24 Q3 FY23 Q3 FY24 O
Slide 10: Cash Flow and Metrics
Cash Flow and Metrics Cash Flow and Metrics Free Cash Flow $131 million Net Debt (as of December 31) $184 million Leverage Ratio (as of December 31) 0.7x Capital Expenditures $44 million Modine Maintains Strong Balance Sheet & Liquidity ▪ Strong free cash flow in the quarter; $47M, primarily due to
Slide 11: Fiscal 2024 Outlook
Fiscal 2024 Outlook Metrics Guidance Comments FY24 Modine Global Sales Outlook Net Sales +4% to +7% $2.4B to $2.5B Adjusted EBITDA* $305M to $313M +44% to +48% Climate Solutions Data Centers +60% – 70% Raising Adjusted EBITDA Outlook HVAC & Refrigeration Flat ▪ Increasing our earnings outlook based
Slide 12: Appendix
APPENDIX
Slide 13: GAAP Income Statement
GAAP Income Statement Modine Manufacturing Company Consolidated statements of operations (unaudited) (In millions, except per share amounts) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net sales $ 561.4 $ 560.0 $ 1,804.3 $ 1,679.8 Cost of sales 434.1 462.4 1,41
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Modine Manufacturing Company Adjusted financial results (unaudited) (In millions, except per share amounts) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net earnings $ 45.1 $ 24.7 $ 137.3 $ 63.3 Interest expense 5.8 5.9 17.8 14.7 Provisi
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Modine Manufacturing Company Segment adjusted financial results (unaudited) (In millions) Three months ended December 31, 2023 Three months ended December 31, 2022 Climate Performance Corporate and Climate Performance Corporate and Solutions Technologies eliminations Total S
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free cash flow (unaudited) (In millions) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 64.2 $ 11.8 $ 175.0 $ 67.9 Expenditures for property, plant and equipment (17.6) (12.2) (43.8) (35.2) Free
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net sales - constant currency (unaudited) (In millions) Three months ended December 31, 2023 2022 Effect of Exchange Rate Net Sales - Net Sales Changes Constant Currency Net Sales Climate Solutions $ 242.5 $ (4.4) $ 238.1 $ 248.6 Performance Technologies 323.0 (5.6) 317.4 31
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations The Company’s fiscal 2024 guidance includes Adjusted EBITDA, which is a non-GAAP financial measure. The full-year fiscal 2024 guidance for Adjusted EBITDA is based upon the Company’s estimates for interest expense of approximately $22 to $24 million, a provision for income t
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