Slide 1: Second Quarter 2024 Earnings Call
Second Quarter 2024 Earnings Call August 2, 2024 © 2024 Chart Industries, Inc. Confidential and Proprietary
Slide 2: Forward Looking Statements (1/2)
Forward Looking Statements (1/2) CERTAIN STATEMENTS MADE IN THIS INVESTOR PRESENTATION ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING CHART’S BUSINESS PLANS, INCLUDING STATEMENTS REGA
Slide 3: Forward Looking Statements (2/2)
Forward Looking Statements (2/2) THIS PRESENTATION CONTAINS NON-GAAP FINANCIAL INFORMATION, INCLUDING ADJUSTED DILUTED EPS, “NET INCOME, ADJUSTED”, FREE CASH FLOW, FREE CASH FLOW, EBITDA, ADJUSTED EBITDA, ADJUSTED OPERATING INCOME, AND ADJUSTED OPERATING MARGIN. FOR ADDITIONAL INFORMATION REGARDING
Slide 4: Agenda
Agenda Q2 2024 Results and Key Drivers 2024 Outlook Medium Term Outlook © 2024 Chart Industries, Inc. Confidential and Proprietary 4
Slide 5: Second Quarter 2024 Key Metrics
Second Quarter 2024 Key Metrics Indicates record for any quarter in history; All metrics are pro forma2 y/y unless noted otherwise $ millions, except per share amounts Q2 2024 Q2 20232 Change • Orders growth of 12.1%; ex Big LNG, Continuing Operations 1 Total Orders $1,164.7 $1,039.2 12.1% orders
Slide 6: Key Takeaways
Key Takeaways All metrics are pro forma2 y/y unless noted otherwise Very strong operational margin1 resulted in multiple all-time record results in the second quarter 2024 • Reported gross margin of 33.8% drove reported operating margin of 16.1% (adjusted 21.7%) • Sales, reported gross profit and gr
Slide 7: Second Quarter 2024 Key Metrics
Second Quarter 2024 Key Metrics All metrics are pro forma2 y/y unless noted otherwise Sales Adjusted EBTIDA1 Orders Net Cash from Operations Historical Record Historical Record +12% $1,165 +27% +19% $116 +37% $257 $1,040 $1,122 $91 $212 $951 $188 $1,039 $876 ($90) Q2'23 Q1'24 Q2'24 Q2'23 Q1'24 Q2'24
Slide 8: Second Quarter 2024 Margin Performance
Second Quarter 2024 Margin Performance All metrics are pro forma1 y/y unless noted otherwise Gross Profit Margin Operating Profit Margin EBITDA Margin2 33.8% 21.7% 24.7% 21.4% 22.1% 16.8% 16.1% 17.2% 10.1% 30.7% Q2'23 Q2'24 Q2'23 Q2'24 Q2'23 Q2'24 Reported Reported Adjusted Reported Adjusted Driven
Slide 9: Synergy Update
Synergy Update Commercial Synergies Cost Synergies Target Executed1 Target Executed1 $924M $250M Year-3 $223M $175M Year-1 $350M Year-3 $150M Year-1 Commercial Synergies Cost Synergies 1 As of 7/31/2024 Note: Howden acquisition closed on March 17, 2023; Year 1 is through 3/17/24; Year 3 is through 3
Slide 10: Q2 2024 Commercial Wins in Growing End Markets
Q2 2024 Commercial Wins in Growing End Markets Air cooled heat Tuf-Lite IV fans for Earthly Labs CCUS Helium and NRU exchangers for data multiple LNG export for C-Fuels equipment in N. America centers facilities Storage tanks for a Compressor packages to Compressors for a LNG regas for industrial se
Slide 11: Leveraging Technologies Across Markets
Leveraging Technologies Across Markets Markets Mission Critical Equipment LTM Q2 2024 Orders by Segment <- Across Traditional Energy to Energy Transition/ Specialty Markets -> Pie chart is percent of total LTM orders Fans Air Cooled Heat Compressors Exchangers (ACHX) Industrial Gas Independent Distr
Slide 12: Data Center / AI-Related Wins and Opportunities
Data Center / AI-Related Wins and Opportunities Chart’s Products For Data Center Applications Recent Wins Air Cooled Heat Fans Compressors Exchangers (ACHX) • ~$40 million data center air cooled heat exchanger (ACHX) Tuf-Lite IV Fans in Action Brazed Aluminum Heat Cold Boxes Carbon Capture Exchanger
Slide 13: Nuclear/ Small Modular Reactor (SMR)
Nuclear/ Small Modular Reactor (SMR) Chart’s Products for Nuclear Applications Recent wins in Nuclear/ SMR ~$4.6B • Fans for nuclear application in France and UK Diaphragm Fans & Blowers Cryogenic Equipment Compressors • Helium circulators & Helium refrigeration engineering study Market Demand • On-
Slide 14: LNG Wins and Opportunities
LNG Wins and Opportunities Orders Q2 2024 Notable LNG Highlights • Tuf-lite IV fans retrofit for two separate US LNG Y/Y growth vs. pro forma Q2’23 Q2’24 customers • Q2 2024 YTD HLNG vehicle tank orders have exceeded Total Chart 12.1% the full year 2023 and 2022 orders for this product Chart ex Big
Slide 15: RSL: Executing the Aftermarket Strategy
RSL: Executing the Aftermarket Strategy RSL Segment Q2 2024 Q2 2023 PF1 % Change Key Aftermarket Wins in Q2 ($M) A. LTSA 3-year service for CNG stations Orders $312.4 $311.0 +0.5% B. Compressor LTSA in Turkey C. O&G customer lifecycle service award Sales 360.5 285.6 +26.2% D. Singapore compressor re
Slide 16: Free Cash Flow Drivers
Free Cash Flow Drivers FCF Bridge Q2 2024 Q2 2024 $ millions Net cash provided by operating activities $116.1 Less: Capital expenditures (28.1) Q2 2024 Free Cash Flow (non-GAAP)(1) $88.0 Long-term balance sheet changes not reflective of quarterly operational cash flow ~27 Emergency field service wor
Slide 17: Working Capital Management
Working Capital Management As Reported NWC % of NWC % of Q2 '23 Q2 '24 Change sales 23% sales 20% Accounts Receivable 787 748 (39) $4.0B Inventory 675 555 (120) $3.6B Accounts Payable 719 906 187 Trade Working Capital $742 $397 ($346) Trade Working Capital % of Sales 21% 10% Net Unbilled & Customer
Slide 18: Agenda
Agenda Q2 2024 Results and Key Drivers 2024 Outlook Medium Term Outlook © 2024 Chart Industries, Inc. Confidential and Proprietary 18
Slide 19: Chart Industries 2024 Outlook
Chart Industries 2024 Outlook Guidance Metrics as of August 2, 2024 Guidance Comments • Backlog conversion $4.45 to $4.60 Revenue • Book & ship business led by aftermarket, service & repair billion • FX impact estimated to be (1.5%-0.5%) $1.08 to $1.15 • Strong margin performance anticipate to conti
Slide 20: 2024 H1 to H2 Adjusted EBITDA Bridge
2024 H1 to H2 Adjusted EBITDA1 Bridge $7-14 $610-$680M $25-75 $63-67 $20-25 $7-9 $18-20 $470M Large Q1’24 Orders Begin Aftermarket Incremental Incremental H2 Backlog Productivity/ H1 24 Revenue Cost H2 24 Big LNG Seasonality Conversion CBE Actual Recognition Synergies Forecast 2024 Adjusted EBITDA G
Slide 21: Agenda
Agenda Q2 2024 Results and Key Drivers 2024 Outlook Medium Term Outlook © 2024 Chart Industries, Inc. Confidential and Proprietary 21
Slide 22: Medium-Term Financial Growth Formula
Medium-Term Financial Growth Formula 3-Year Target Secular Growth Organic Revenue 1 Mid-teens CAGR Trends Energy Security Reported Gross Margin Mid-30%’s Energy Access Adjusted Diluted Earnings per share 2 Mid-40%’s CAGR Full Solution Offering Sustainability FCF Conversion 3,4 95-100% Private and Pu
Slide 23: Appendix
Appendix © 2024 Chart Industries, Inc. Confidential and Proprietary 23
Slide 24: Trade Working Capital Management
Trade Working Capital Management As Reported Accounts Receivable Inventory $675 $787 $748 $555 Source of Cash Source of Cash Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Accounts Payable $906 Trade Working Capital $742 $397 $719 Source of Cash Source of Cash Q2 202
Slide 25: Strong and Flexible Capital Structure
Strong and Flexible Capital Structure Debt Covenant2: Net Debt / LTM Bank EBITDA(1) 7 • Liquidity of $980 million 6.0X 6.0X 6.0X 6.0X 6.0X 6 • Long-dated debt maturity profile with 5.0X majority of debt due after 2029 5 4.08X • Opportunistically repriced TLB for 4 3.86X 3.59X second time in 9 months
Slide 26: Q2 2024 Segment Commentary
Q2 2024 Segment Commentary All metrics are pro forma1 y/y unless noted otherwise CTS HTS SPC RSL Reported Y-O-Y Reported Y-O-Y Reported Y-O-Y Reported Y-O-Y (9.4%) Orders $159.0 +4.5% $269.6 + ~40% ex $423.7 +48.4% $312.4 +0.5% Big-LNG Sales $165.5 +12.4% $236.7 +3.4% $277.6 +20.8% $360.5 +26.2% Rep
Slide 27: Broad Macro Tailwinds Positively Impacting Chart Industries
Broad Macro Tailwinds Positively Impacting Chart Industries Macro Drivers REF (Not All Inclusive) Specific Tailwinds How Chart Plays A Global Energy Transition • Energy security, energy access, and • Equipment and process technology for the and Access energy/grid stability production, distribution &
Slide 28: Chart's End Market Opportunity Pipeline
Chart’s End Market Opportunity Pipeline End Market Chart Standalone Prior Quarter Current Quarter Trend June 30, 2022 March 31, 2024 June 30, 2024 Big LNG • $5.35 billion • $8.76 billion • $9.20 billion • 24 projects • 30 projects • 32 projects • 3 int'l projects for potential • 15 int'l projects fo
Slide 29: ESG and Sustainability Update
ESG and Sustainability Update • In the second quarter, Chart joined the United Nations Global Compact, a voluntary leadership platform for the development, implementation, and disclosure of sustainable and socially responsible business practices. • Chart was named a winner of the 2024 Enlightened Gr
Slide 30: Adjusted EPS Reconciliation Table
Adjusted EPS Reconciliation Table YTD June Q2 2024 Q2 2023 Q1 2024 Amounts attributable to Chart common stockholders 2024 Diluted Diluted EPS Diluted EPS Diluted EPS EPS Net income (loss) attributable to Chart Industries, Inc. 58.6 9.1 11.3 69.9 Less: (Loss) income from discontinued operations, net
Slide 31: Pro Forma Adjusted EPS Reconciliation Table
Pro Forma Adjusted EPS Reconciliation Table $ millions, except per share Q2 2024 Q2 2023 Net income (loss) attributable to Chart Industries, Inc. $58.6 $9.1 Less: (Loss) income from discontinued operations, net of tax (0.2) 2.5 Income from continuing operations 58.8 6.6 Less: Mandatory convertible p
Slide 32: Second Quarter 2024 Adjusted EBITDA
Second Quarter 2024 Adjusted EBITDA $ millions Q2 2024 Q2 2023 Q1 2024 Consolidated Net income from continuing operations 63.1 9.6 16.8 Income tax expense 15.5 2.4 8.8 Interest expense, net 84.3 83.9 83.8 Loss on extinguishment of debt - - 0.7 Depreciation and amortization 66.0 62.9 65.9 EBITDA (non
Slide 33: Free Cash Flow and Pro Forma Free Cash Flow Reconciliation Table
Free Cash Flow and Pro Forma1 Free Cash Flow Reconciliation Table $ millions Q2 2024 Q2 2023 Net cash provided by (used in) operating activities from continuing operations 116.1 96.8 Capital Expenditures (28.1) (20.9) Free Cash Flow1 from continuing operations (non-GAAP) 88.0 75.9 Less: FCF from Ame
Slide 34: Segment Pro Forma Reconciliation
Segment Pro Forma1 Reconciliation Three Months Ended June 30, 2023 Repair, Cryo Tank Heat Transfer Specialty Service & Intersegment $millions Solutions Systems Products Leasing Eliminations Corporate Consolidated Orders $155.0 $302.2 $293.2 $319.7 ($7.0) - $1,063.1 Howden standalone sales, net of Ro
Slide 35: Q2 2023 Pro Forma Reconciliation Table
Q2 2023 Pro Forma Reconciliation Table $millions $millions Orders 1,063.1 Adjusted EBITDA (non-GAAP) 195.3 Less: Orders from American Fan (divested in Q4 2023) 14.3 Less: EBITDA from American Fan (divested in Q4 2023) 4.4 Less: Orders from Cofimco (divested in Q4 2023) 8.6 Less: EBITDA from Cofimco