Enerpac Tool Group Corp. · NYSE:EPAC
Enerpac Tool — Q3 2021 Earnings Presentation
21 slides from Enerpac Tool's earnings presentation, Jun 29, 2021
Slide 1: Fiscal 2021 Third Quarter Earnings
Fiscal 2021 Third Quarter Earnings June 29, 2021 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that are not historical are considered “forward-looking statements” and are subject to change based on various factors and uncertainties that may cause actual results to differ significantly from expectations. Those factors are contained in
Slide 3: Fiscal 2021 Third Quarter – Executing on Key Priorities
Fiscal 2021 Third Quarter – Executing on Key Priorities Employee Safety Remains #1 Concern ▪ Goal Zero ▪ Critical as return to normalized activity/volumes Financial Highlights ▪ Return to year-over-year growth ▪ Strong product sales with service at varying stages of recovery ▪ Incremental margins in
Slide 4: Market Update
Market Update Product Net Sales IT&S Consolidated Product Net Sales* (pre-COVID) The pressure wave shows that by May we were squarely back in the middle of the five-year pre- COVID sales range for IT&S product sales and expect to remain there in Q4 4 *includes acquisitions from date of purchase and
Slide 5: Third Quarter 2021 Summary
Third Quarter 2021 Summary Financials ▪ Sales: $143M ▪ Core sales growth of 36% (Product up 40% and Service up 23%) ▪ Adjusted EBITDA incremental margins of 47%, excluding the impact of currency, exceeding our target range of 35-45% ▪ Adjusted Diluted EPS: $0.28 ▪ Free Cash Flow: $35M of cash genera
Slide 6: Regional/Vertical Markets
Regional/Vertical Markets Americas / Europe ▪ Return to significant year-over-year core growth in both regions ▪ Key Verticals ▪ Positive trends continue in Power Generation, Construction and General Industrial in North America ▪ Infrastructure and Power Generation remains strong in Europe ▪ Mining
Slide 7: Regional/Vertical Markets and Operations
Regional/Vertical Markets and Operations Middle East/North Africa/Caspian (MENAC) ▪ Return to year-over-year core growth ▪ COVID related border lockdowns and restrictions on foreign national travel (India, Nepal, etc) affecting labor availability and movement ▪ Delayed maintenance projects slowly st
Slide 8: Third Quarter 2021 Comparable Results
Third Quarter 2021 Comparable Results (US$ in millions except EPS) $143 17.1% NET SALES* $121 • Core sales growth of 36% (product 40% and service 23%) $102 9.5% • IT&S product sales 44% 6.5% • Other product 8% • New Product Development (NPD) – 4 new product families launched • NPD % of product sales
Slide 9: Net Sales Waterfall
Net Sales Waterfall* (US$ in millions) $160 $140 $5.6 $143.1 $31.8 $120 $3.8 We are encouraged by $100 the level of product $101.9 volume that we saw during the quarter as $80 our primary end markets showed strong recovery in some $60 regions of the world and moderate recovery in $40 other regions $
Slide 10: Adjusted EBITDA Waterfall
Adjusted EBITDA Waterfall* (US$ in millions) $40 $35 $2.8 Adjusted EBITDA $12.3 benefited from higher $2.7 volumes and $30 restructuring savings $20.8 partially offset by the $25 year-over-year decrease $1.4 in COVID related $24.4 temporary cost savings $20 put in place to offset 12.3% 13.3% reduced
Slide 11: Supply Chain Update
Supply Chain Update Commodity Costs ▪ Steel and aluminum pricing has remained at all-time highs ▪ Negotiating supplier price increase requests ▪ Pricing actions taken, largely effective June 1 Logistics ▪ Freight costs and availability remain a challenge ▪ Limited capacity driving costs up ▪ If rate
Slide 12: Liquidity – Positioned for Success
Liquidity – Positioned for Success (US$ in millions) $35 $164 $286 $136 $115 2.1 $210 $195 1.8 $11 1.1 $1 Q3 2020 Q2 2021 Q3 2021 Q3 2020 Q2 2021 Q3 2021 Q3 2020 Q2 2021 Q3 2021 Q3 2020 Q2 2021 Q3 2021 Free Cash Flow Cash Balance Gross Debt TTM Financial Leverage* Free Cash Flow (FCF) Debt & Leverag
Slide 13: Thoughts on Remainder of Fiscal 2021
Thoughts on Remainder of Fiscal 2021 ▪ Anticipate that net sales will return to pre-COVID levels as we exit the fiscal year ▪ Expect incremental EBITDA margins on the high end of 35%-45%, excluding the impact of currency ▪ Continue to execute our strategy ▪ Strategic capital allocation focused on dr
Slide 14: Expectations for Second Half of Fiscal 2021
Expectations for Second Half of Fiscal 2021 Expectations for 2H of Fiscal 2021: ▪ Sales in the range of $290 million to $295 million, implying Q4 sales of $147 million to $152 million ▪ Projected year-over-year core growth by category ▪ IT&S Product ~ low 30% We are optimistic as we progress through
Slide 15: Clear Value Creation Model – Long Term Vision
Clear Value Creation Model – Long Term Vision CORE GROWTH ABOVE MARKET DRIVING EFFICIENCY AND PROFITABILITY ~5% CORE GROWTH CAGR OR ~25% EBITDA MARGINS 200-300bps CORE SALES GROWTH > MARKET ▪ 35%-45% incremental ▪ Completion of service & margins product line restructuring ▪ Product innovation ▪ Comm
Slide 16: Q&A
Q&A
Slide 17: Appendix
Appendix
Slide 18: Third Quarter 2021 GAAP vs Non-GAAP Reconciliation
Third Quarter 2021 GAAP vs Non-GAAP Reconciliation (US$ in millions except EPS) The summation of individual components may not equal the total due to rounding Less Corporate Development & Gain on Restructuring Board Search Sale of Other Tax GAAP Charges Charges Facility Benefits Adjusted Sales $143.
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures (US$ in millions) Adjusted EBITDA Free Cash Flow Q3 Q3 2021 2020 Net Earnings $25 ($5) 0 Q3 Q3 Net Financing Costs $1 $5 2021 2020 Income Taxes ($4) $0 Depreciation & Amortization $5 $5 Cash From Operations $ 12 $ 13 Capital Expenditures $ (4) $ (2) Restructuring
Slide 20: Adjusted Operating Profit Waterfall
Adjusted Operating Profit Waterfall* (US$ in millions) $35 Adjusted $30 Operating Profit $2.7 benefited from $12.3 higher volumes $25 $2.7 and restructuring savings partially $20.8 offset by the $20 year-over-year $3.2 $19.5 decrease in COVID related $15 temporary savings $10 $5 $0.1 $2.3 $0 Q3 FY20
Slide 21: Enerpac Tool Group
ENERPAC (7) TOOL GROUP