Northrop Grumman Corporation · NYSE:NOC
Northrop Grumman — Q1 2023 Earnings Presentation
16 slides from Northrop Grumman's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Conference Call
NORTHROP GRUMMAN First Quarter 2023 Conference Call April 27, 2023 Kathy Warden Dave Keffer Chair, Chief Executive Officer Corporate Vice President and President and Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and the information we are incorporating by reference, and statements to be made on the earnings conference call, Business and Operational Risks contain or may contain statements that constitute “forward-looking statements” within the meaning of the Priva
Slide 3: Highlights
Highlights Enterprise Spotlight • The President’s budget request demonstrates strong support for NG programs $77.5B • IBCS approved for full rate production Q1 Backlog • Sentinel completed successful milestone tests • Northrop Grumman won the prestigious Collier Trophy for James Webb Space Telescope
Slide 4: Q1 Sales
Q1 Sales Sales $9,083 $8,720 6% Three Months Ended March 31 ($M) 2022 2023 ▲% Aeronautics Systems $2,703 $2,515 (7)% Defense Systems 1,283 1,376 7% $8,797 $9,301 Mission Systems 2,497 2,563 3% Space Systems 2,855 3,350 17% Intersegment Eliminations (541) (503) Total Sales $8,797 $9,301 6% Q1 2022 Q1
Slide 5: Q1 Segment Operating Income and Margin Rate
Q1 Segment Operating Income* and Margin Rate* Segment Operating Income* Three Months Ended March 31 Segment Operating Income* Segment Margin Rate* (3)% ($M) 2022 2023 ▲% 2022 2023 ▲ Aeronautics Systems $307 $237 (23)% 11.4% 9.4% (200) bps Defense Systems 155 160 3% 12.1% 11.6% (50) bps $1,037 $1,002
Slide 6: Q1 EPS Bridge
Q1 EPS Bridge Diluted Earnings Per Share Q1 2022 $6.10 (10)% Net Pension* (1.04) Marketable Securities 0.21 $6.10 $5.50 Tax, Interest, and Other 0.23 Q1 2023 $5.50 Q1 2022 Q1 2023 First quarter EPS include a headwind of over $1 per share from lower net FAS/CAS pension income * Net Pension tax effect
Slide 7: FAS/CAS Pension Adjustment Impact per Share
FAS/CAS Pension Adjustment Impact per Share FAS/CAS impact per share Three Months Ended March 31 $ in millions, except per share amounts 2022 2023 FAS/CAS operating adjustment $(46) $(21) Non-operating FAS pension benefit 376 132 Total net FAS/CAS pension adjustment 330 111 Tax effect* (83) (28) $1.
Slide 8: 2023 Sector Guidance
2023 Sector Guidance* 2023 Guidance* as of 2023 Guidance* as of 1/26/2023 4/27/2023 Sales ($B) OM Rate % Sales ($B) OM Rate % Aeronautics Systems Mid $10 ~10% Mid $10 ~10% Defense Systems Mid $5 ~12% Mid $5 ~12% Mission Systems High $10 Low 15% High $10 Low 15% Space Systems Mid $13 Mid 9% Mid $13 M
Slide 9: 2023 Company-Level Guidance
2023 Company-Level Guidance(1) $ in millions, except per share amounts As of 1/26/2023 As of 4/27/2023 Sales $38,000 — $38,400 $38,000 — $38,400 Segment operating income(2) $4,300 — $4,400 $4,300 — $4,400 Total Net FAS/CAS pension adjustment(3) ~$450 ~$450 Unallocated corporate expense: Intangible a
Slide 10: Key Takeaways
Key Takeaways JWST Franchise Strong Global Programs Well Defense Budget Aligned to Outlook Customer Priorities GBSD IBCS Industry- leading Sales Growth First Quarter 2023 Conference Call 10
Slide 11: Appendix
Appendix First Quarter 2023 Conference Call 11
Slide 12: Financial Guidance
Financial Guidance Financial guidance, as well as outlook, trends, expectations and other forward looking statements provided by the company for 2023 and beyond, reflect the company's judgment based on the information available to the company at the time of this release. The company’s financial guid
Slide 13: Non-GAAP Definitions
Non-GAAP Definitions Non-GAAP Financial Measures Disclosure: This presentation contains non- Free cash flow: Net cash provided by operating activities less capital GAAP (accounting principles generally accepted in the United States of America) expenditures. We use free cash flow as a key factor in o
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment Operating Income Three Months Ended March 31 ($M) 2022 2023 Total sales $8,797 $9,301 Operating income $897 $947 Operating margin rate 10.2% 10.2% Reconciliation to segment operating income: FAS/CAS operating adjustment $46 $21 Unallocated corporate expense (income):
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Free Cash Flow (1) Three Months Ended March 31 ($M) 2022 2023 ▲% Net cash used in operating activities $(488) $(702) 44% Capital expenditures (244) (309) 27% Adjusted free cash flow (1) $(732) $(1,011) 38% First Quarter 2023 Conference Call 15
Slide 16: First Quarter 2023 Conference Call
First Quarter 2023 Conference Call 16